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South Korea makes first back-to-back rate cuts since 2009 By Reuters

By Cynthia Kim and Jihoon Lee

SEOUL (Reuters) -South Korea's central bank prick benchmark hobby charges for a 2d straight meeting on Thursday in a surprise switch as the economic system stalled and inflation slowed extra than policymakers predicted.

The Bank of Korea (BOK) decreased its benchmark hobby rate by a quarter percentage show three.00% at its protection evaluate, an consequence most effective four of 38 economists polled by Reuters foresaw. All others anticipated the bank to sustain charges unchanged.

It changed into once the first attend-to-attend rate prick since early 2009 as policymakers sought to revive the economic system now that inflation has advance beneath sustain watch over.

South Korea's economic system barely skirted a technical recession within the third quarter, rising fair 0.1% after an earlier contraction, as a restoration in interior most consumption slowed and exports stalled.

Even supposing policymakers are desirous about international exchange stability, with the won Asia's worst-performing currency this 365 days, officials are an increasing number of apprehensive about U.S. President-elect Donald Trump's tariff plans.

The authorities is pondering drawing up a supplementary funds early next 365 days to counter slumping person spending and slowing economic growth, local media reported final week.

"There's soundless some uncertainty in regards to the Trump administration's protection, so the (buck-won) exchange rate looks to be beneath upward stress," mentioned Min Ji-hee, an analyst at Mirae Asset Securities. "On this regard, the uncertainty of external factors is susceptible to ease gradually after Trump's inauguration."

The BOK downgraded forecasts for both growth and inflation this 365 days.

It prick 2024 growth forecast to 2.2% from 2.4% beforehand. For next 365 days it sees the economic system rising 1.9%, weaker than its 2.1% outlook sooner than.

It additionally sees person inflation at 2.3% for this 365 days, slower than 2.5% forecast beforehand.

South Korea's protection-soft three-365 days treasury bond futures rose as principal as 0.23 aspects to 106.64 after the rate resolution, whereas the won weakened.

© Reuters. FILE PHOTO: The emblem of the Bank of Korea is viewed in Seoul, South Korea, November 30, 2017. REUTERS/Kim Hong-Ji/File Describe

The BOK adopted a honest-to-dovish stance in direction of protection in October, when it made its first hobby rate prick in further than four years as ask softened.

Governor Rhee Chang-yong holds a news conference at spherical 0210 GMT, which would perhaps be livestreamed through YouTube.

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