All BOK policymakers vote for Jan. rate cut: minutes

SEOUL, Feb. 24 (Yonhap) -- Policymakers at the Bank of Korea (BOK) voted
unanimously to cut its key interest rate by half a percentage point in a bid to
jumpstart the sputtering economy, according to its minutes released Tuesday.
On Jan. 9, the seven members of the BOK's monetary policy committee decided to
slash the benchmark seven-day repo rate to 2.5 percent, marking the fifth
reduction in three months.
"The Korean economy is sharply contracting at a faster-than-expected pace.
Financial market conditions somewhat improved, but a credit squeeze still
persists," one policymaker was quoted as saying in the minutes. "A large rate cut
is inevitable as the fast slowing economy will aggravate the credit crunch and
erode growth potential."
The rate cut comes as the South Korean economy is sharply losing steam amid
tumbling exports and weakening domestic demand. The local economy shrank 5.6
percent last quarter from three months earlier, the sharpest fall in 11 years.
On Feb. 12, the BOK cut the rate by 0.5 percentage point to a record low of 2
percent and hinted at further rate cuts. Since October, the BOK has trimmed the
rate by a combined 3.25 percentage points.
"Additional rate adjustments are possible, but the central bank will adjust their
pace after monitoring the financial market closely," BOK Gov. Lee Seong-tae told
a press conference after the rate-setting meeting.
The Korean economy is widely expected to post negative growth this year, marking
the first annual contraction since the 1997-98 Asian financial crisis. The next
rate review meeting is slated for March 12.
sooyeon@yna.co.kr
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