Seoul: South Korea’s top economic policymaker on Thursday welcomed the central bank’s unexpected decision to cut its benchmark interest rate for the second time in a row, reaffirming the government’s commitment to revitalizing economic growth. In a surprise move, the monetary policy committee of the Bank of Korea (BOK) slashed its key rate by 25 basis points to 3 percent, one month after it cut the rate by a quarter percentage point in the first pivot in its policy stance in over three years.

According to Yonhap News Agency, Finance Minister Choi Sang-mok expressed his support for the BOK’s decision during a radio interview, stating, “I respect and welcome the decision.” He emphasized the importance of the rate cut given the current challenges facing domestic demand and livelihoods, suggesting that the reduction would positively impact the economy.

Many analysts had anticipated that the BOK would maintain the current rate in November, particularly as the Korean won has recently depreciated, hovering around
the critical 1,400 won-per-dollar threshold. Despite these expectations, the BOK’s decision indicates that the urgency to stimulate the sluggish economy took precedence over concerns regarding foreign exchange volatility and rising household debt.

Choi also highlighted the government’s plans to enhance policy efforts aimed at supporting domestic demand and improving livelihoods, aligning with the central bank’s recent actions to boost economic growth.