South Korea central bank cuts rates to record low 1.50% after Mers outbreak

[SEOUL] South Korea's central bank cut its policy rate by 25 basis points to a record-low 1.50 per cent on Thursday to offset any potentially harmful economic effects from an outbreak of the Middle East Respiratory Syndrome (MERS).

A Bank of Korea media official announced the monetary policy committee's decision to lower the base rate, without elaborating. Governor Lee Ju-yeol is due to hold a news conference from 11.20am (0220 GMT).

It was the fourth rate cut in less than a year and the seventh since the current easing cycle began three years ago as the trade-reliant economy, the fourth-largest in Asia, has struggled for traction over the past year.

Fifteen out of the 28 analysts surveyed by Reuters had forecast the central bank would lower the rate to 1.50 per cent, while the rest saw a steady rate.

Nine people have died since the outbreak was first reported in late May, fuelling public anxiety and hitting spending, with thousands in quarantine and hundreds of schools closed.

REUTERS