June 9th, 2016 | By: Christine Kim & Choonsik Yoo
South Korea’s central bank surprised markets by cutting interest rates to a record low 1.25 percent on Thursday, to cushion the economy against weak exports and the fallout from a massive restructuring of an ailing shipping industry.
The 25 basis points reduction was the first cut since the Bank of Korea (BOK) last lowered rates in June 2015.
Though low inflation is a source of concern, and a reason for lowering interest rates, some economists doubted whether the central bank could afford to cut again once an anticipated increase in U.S. interest rates finally takes place.
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