The Central Bank of South Korea lowers interest rates

The Central Bank of South Korea lowered its political interest rate by 25 basic points on Thursday, when the country faces a double part of the protracted political upheaval and the broad tariffs of Trump.

Bank Korea reduced the rates to 2.5% of 2.75%The lowest level since August 2022 in accordance with the expectations of economists interviewed by Reuters. This noted the fourth reduction of the Central Bank at the last six meetings.

The reduction of a quarter of the percentage came when the country continued to fight increased political uncertainty after trying to excite the former leader Jono Suka Jola to introduce martial law in December.

South Korea was cut by 25% of the Trump administration, which was later rejected for 90 days. South Korean leaders are racing to make a deal with the US government before July 8 term.

Both sides stated that they still sought to coordinate the package of tariffs and economic cooperation, but recently stated the Minister of Trade and Industry of South Korea Time was not enoughAnd the upcoming elections can postpone it further.

South Koreans will Go to the elections on June 3 Choose the next president. The election was summoned after Yeal was impeteered as a president and taken away.

GDP GDP South Korea unexpectedly contract in the first quarter, shrinks of 0.1% A year earlier, according to preliminary estimates published last month. This noted the first reduction from the fourth quarter of 2020.

Board’s Council Council has attributed the decision to reduce the rate to its expectations that economic growth is “significantly decreased” and inflation remains “wide”, according to it statement.

“The Council will retain its rate of reducing the rate to mitigate the risk of declining economic growth and set the timing and pace of any further declines of basic rates, carefully monitoring the changes in the internal and foreign political environment,” the statement reads.

The Central Bank also reduced GDP forecast throughout 2025 to only 0.8%, which is much lower than the previous projection of 1.5%.

The election of the new president should lead to the introduction of “so necessary fiscal stimulus”, Gareth Leather, Asia’s Senior Economist, Capital Economics, said in the note, believing that consumer expenses are gaining.

However, this increase may be insufficient to compensate for the drop in the real estate and the disruption of exports, dragging GDP growth throughout the year to only 0.5%, calculated skin.

Following the announcement of the Kospi shares in the country jumped by 1.25%, while the South Korean won 0.71%, the last bidding for 1383.40 against Greenbek.