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.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source