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BOK reduces key interest rate to 1.5% among uncertainties



South Korea's central bank on Thursday reduced the nation's government rate to 1.5 percent, including raising incredible uncertainties, officials have announced.

It also decided to sharply increase the country's growth rate this year by 0.3 percentage points to 2.2 per cent from 2.5 per cent.

Bank of Korea Gov. Lee Ju-Yeol trusts the monetary policy meeting on Thursday. (Yonhap)

The Bank of Korea held its rate-setting Monetary Policy Board and decided to cut the base rate by 25 basis points to 1

.5 percent.

The rate cut decision came a step earlier than the US Fed is largely expected to slow down its own rate later this year.

It was also delivered against the widespread expectation that Seoul's monetary policy makers will cautiously maintain a wait this month and make a move after the Fed's announcement.

According to a previous survey by the Korea Financial Investment Association of 200 bond experts here, 70 percent of respondents predicted a rate freeze this month.

The book's preemptive rate change was seen as reflecting on the growing concerns about the slow recovery of the nation's backbone chip business and the impact of Japan's recent export restrictions.

In its previous April forecast, BOK predicted that the semiconductor exports would return in the second half of the year, but in July the figures so far have been noticed.

Korea Customs data showed that exports amounted to USD 13.56 billion as of July 10, a decrease of 2.6 per cent from the same period last year. The daily average, in terms of actual operating times, was $ 1.6 billion, down 14 percent from the previous year.

External uncertainties have also continued to balance the global economy.

While trade tensions between the United States and the United States have reduced China to some degree since last month's 20 summit, Japan's recent export regulation on key high-tech materials has risen as a new downside risk to Korea's trade-dependent economy.

By Bae Hyun-jung (tellme @ heraldcorp.com)


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