South Korea cuts lending rate

Reuters
Friday, January 9, 2009
SEOUL: The South Korean central bank cut its key interest rate Friday by 50 basis points as expected to a new record low, the fifth reduction in three months, in a bid to fend off the nation's first recession in a decade.

The Bank of Korea cut the base rate to 2.5 percent from 3 percent, a media official at the central bank announced, without elaborating.

The reduction follows cuts totaling 2.25 percentage points since early October, including an unprecedented and unexpected cut of one percentage point in December.

The central bank began setting the benchmark rate target in May 1999. Prior to that, it exercised monetary policy by controlling the M2 money supply, which measures money in circulation and checks and savings account deposits at banks.