BUSINESS

South Korea cuts key interest rate to record low of 1.75 pct

Staff Writer
Columbus CEO

SEOUL, South Korea (AP) — South Korea has lowered its key policy rate to a record low of 1.75 percent from 2 percent.

Bank of Korea said Thursday its policymakers cut the interest rate by a quarter of a percentage point for the first time in five months.

The move was unexpected as analysts had predicted that the central bank would stand pat amid concerns about growing household debt.

The rate cut comes as South Korea's consumer prices gained less than 1 percent for the last three months despite government's efforts to boost consumption and investment in the private sector.

Earlier this week, South Korea's finance ministry expressed concerns about Asia's fourth-largest economy falling into deflation.

The central bank lowered the benchmark interest rate two times last year.