South Korea’s central bank cut its key interest rate yesterday for the fifth time in just three months to help shore up the country’s sagging economy.
The Bank of Korea lowered the benchmark seven-day repurchase rate to a new record low of 2.5 percent from 3 percent at a regular policy meeting yesterday.
“Domestic economic activity is slackening at a rapid pace,” the bank’s monetary policy committee said in a statement. “The downside risk to economic growth is considered to have been heightened by the persistent financial market unrest including the credit crunch.”
The central bank has joined others worldwide in slashing rates to battle the global financial crisis. The Bank of England on Thursday cut rates to 1.5 percent — the lowest level in its 315-year history.
South Korea’s export-driven economy has been hit hard by declines in global consumer demand. Factory output plunged 14.1 percent in November from the same month the year before, government data show.
Exports fell 17.4 percent last month, following a drop of 18.3 percent in November.
The Bank of Korea said last month that the economy will probably manage growth of just 2 percent this year from an estimated 3.7 percent last year. South Korea, Asia’s fourth-largest economy, grew 5 percent in 2007.
Some economists, however, say South Korea could this year suffer its first contraction on an annual basis since 1997, when it was in the throes of the Asian economic crisis.
Yesterday’s cut marked the fifth time the Bank of Korea has slashed the key rate since Oct. 9. A full percentage point reduction last month was its biggest ever.
South Korea’s benchmark stock index fell 2.1 percent yesterday to close at 1,180.96. The won fell 0.7 percent against the US dollar to finish at 1,343.
South Korea’s rate still remains above those of some major central banks. The US Federal Reserve’s key rate is at a record low, in a range of zero to 0.25 percent. The Bank of Japan’s benchmark rate is at 0.1 percent.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS