In a surprising move, South Korea's central bank has cut its benchmark rate... after its July policy meeting today,... citing external factors including Japans' recent export restrictions against South Korea.<br />For more, we have our Kim Da-mi on the line for us at the Bank of Korea.<br />Dami, what can you tell us?<br /><br />Jiyoon,<br />The Bank of Korea slashed its policy rate by 25 basis points to 1-point-five percent... to help spur growth amid prolonged trade tensions.<br />This is the first rate cut since last November when the central bank raised the rate by 25 basis points to one-point-75 percent.<br />In fact, the last rate cut was 3 years ago back in 2016,... when the rate was at a record-low of 1-point-25 percent amid slow economic growth.<br />The BOK pointed to growing external uncertainties,... including the U.S.-China trade dispute,... as well as Japan's latest export restrictions on South Korea.<br />The unexpected rate cut also comes after seven consecutive months of decline in the country's exports.<br />Exports, a key driver of South Korea's economic growth, could face further headwinds due to Japan's latest export curbs on key materials for the production of semiconductors and display panels.<br />The BOK also pegged the country's GDP growth rate to 2 percent this year,... lower than its April forecast of 2-point-5 percent,... due to the fall in outbound shipments and investment.<br />The BOK governor also said Japan's export curbs did influence the central bank's decision... and added if Japan dials up economic pressure, it could have a measurable impact on Korea's economic growth.<br /><br />Bank of Korea Governor Lee Ju-yeol had earlier hinted at a possible rate cut,... but the timing of it came as a surprise to many market observers, right?<br /><br />Yes. Many analysts had expected the move to happen in August,... with the U.S. Federal Reserves expected to lower its own key rate at the end of this month.<br />However, the central bank's latest decision sends out a strong message,... that an expansionary monetary policy is needed... to boost the country's economic growth.<br />The Bank of Korea said it will maintain its accommodative policy stance to support the domestic economy... and carefully monitor the U.S.-China trade war, as well as Japan's latest export curbs.<br />That's all from me, Ji-yoon.<br />
