Bank of Korea Delivers Surprise Back-to-Back Rate Cut to 3%

The central bank's unexpected move reflects concerns over slowing growth, weaker inflation, and a downgraded economic outlook.

The Bank of Korea reduced its benchmark interest rate by 25 basis points to 3.00%, marking its first consecutive rate cuts since 2009.
Only 4 of 38 economists in a Reuters poll predicted the rate cut, with most expecting rates to remain unchanged at 3.25%.
The decision follows weaker-than-expected GDP growth of 1.5% in Q3, below the forecasted 2%, and a revised 2024 growth outlook of 2.2%.
Inflation in South Korea has slowed significantly, with October's rate at 1.3%, the lowest since February 2021.
Market reactions included a rise in three-year treasury bond futures, a weakening of the won, and a slight increase in the Kospi stock index.