BOK policymakers vote unanimously for October rate cut, minutes show

SEOUL, Nov. 25 (Yonhap) -- Policymakers at South Korea's central bank voted unanimously to cut its key interest rate by a quarter percentage point to bolster the slowing economy, its October minutes showed Tuesday.

In a rate-setting meeting on Oct. 9, the Bank of Korea (BOK) slashed the
benchmark 7-day repo rate to 5 percent, the first rate cut since November 2004.
"Downside risks to growth sharply increased. As major central banks cut their
interest rates, a possible rate reduction (by the BOK) would have a limited
impact on the local currency," one policymaker said.
The BOK joined a round of rate cuts by global central banks led by the U.S.
Federal Reserve, aiming to stem the deepening global financial rout.
Since October, the BOK has trimmed the rate by a combined 1.25 percentage point
to 4 percent in a bid to keep global financial turmoil from sharply slowing the
real economy.
"The stabilization of the won-dollar foreign exchange rate would be dependent on
the pace of how fast jitters in the global financial markets ease, rather than on
South Korea's economic fundamentals," another member said. The won has declined
almost 38 percent to the U.S. dollar so far this year, putting upward pressure on
inflation.
The South Korean economy grew 0.6 percent in the third quarter from three months
earlier, the slowest growth in four years, due to sluggish domestic demand and
lagging export growth.
Meanwhile, the country's consumer price growth slowed to 4.8 percent on-year in
October as oil and commodity prices declined.
In early November, BOK Gov. Lee Seong-tae hinted at an additional rate cut,
citing growing downside risks to growth. The next rate review is slated for Dec.
11.