Seoul: South Korea's central bank has unexpectedly reduced its benchmark interest rate for the second consecutive session, signaling a policy shift aimed at boosting economic growth amid declining exports and uncertainties linked to the new Donald Trump administration. The Bank of Korea (BOK) cut its key rate by 25 basis points to 3 percent during a meeting in Seoul, a month after its previous reduction. According to Yonhap News Agency, this move marks the first rate reduction since May 2020 and the first policy pivot since August 2021. Analysts had largely anticipated that the BOK would maintain the current rate in light of the Korean won's recent depreciation and ongoing concerns about high household debt levels. However, the decision suggests that the central bank prioritized economic revitalization over addressing foreign exchange volatility and household debt issues. The BOK stated that despite increased exchange rate volatility, inflation stabilization and a slowdown in household debt continue, while economic growth pressure has intensified. The bank highlighted the global economic uncertainties driven by the new U.S. administration's policies and potential geopolitical risks as influential factors. Furthermore, the BOK revised South Korea's 2025 economic growth forecast downward to 1.9 percent from an earlier projection of 2.1 percent, and also lowered this year's forecast from 2.4 percent to 2.2 percent. These figures fall below the nation's potential growth rate of 2 percent and are less optimistic than the International Monetary Fund's 2.2 percent growth estimate. The country has been grappling with slower export growth, a critical economic driver, with October exports increasing by only 4.6 percent year-on-year to $57.5 billion, the smallest gain since March. The government and experts have expressed concerns about further export slowdowns potentially exacerbated by the U.S. President-elect's high tariffs and protectionist policies. Additionally, the rate cut aligns with a downward trend in inflat ion, as consumer prices rose by just 1.3 percent in October, marking the lowest level in 45 months and staying below 2 percent for the second month in a row. The BOK also reduced its inflation forecasts for 2024 and the next year, reflecting continued economic challenges.