South Korea cuts key interest rate to record low

Source: Agencies  |   2008-12-11  |     ONLINE EDITION

SOUTH Korea's central bank carried out its biggest interest rate cut ever today, slashing borrowing costs by a full percentage point to a record low in a bid to stave off possible recession.

The Bank of Korea said it was slashing its benchmark seven-day repurchase rate to 3 percent from 4 percent during a regular policy meeting today.

It was the fourth time for the bank to lower the rate in the past two months and exceeded the 0.75 percentage point emergency cut on Oct. 27, previously the largest one.

The rate has gone from 5.25 percent to 3 percent since the cycle of easing began on Oct. 9.

The previous record low for the bank's benchmark rate was 3.25 percent last seen in October 2005.

South Korea's economy slowed in the third quarter and economists are predicting it could falter further next year amid global economic weakness.