South Korea’s central bank on Friday cut its key benchmark interest rate, its first pivot in its years-long monetary tightening mode, as inflation continued to moderate and the property market showed signs of cooling.

The Bank of Korea (BOK) slashed its key rate by 25 basis points to 3.25%, the first reduction since August 2021, when Asia’s fourth-largest economy began to emerge from the coronavirus pandemic-caused slump.

Many experts had noted that the central bank will not be able to delay a rate cut any longer, especially after inflation dropped to 1.6% in September, below its target rate of 2%.

The BOK had continued to stand pat at 3.5% following rate freezes since February last year after delivering seven consecutive rate hikes from April 2022 to January 2023.

The rate cut aligns the BOK with central banks in the US, UK, European Union and Canada, which have all embarked on an easing cycle as the global economy shows signs of cooling and inflation slows.

Source: Qatar News Agency