SEOUL: South Korea on Thursday became the latest country to cut interest rates as the central bank announced a surprise 25 basis point reduction to a record-low 1.75 percent, as it tries to fend off deflation and kickstart the struggling economy.

The cut is the second by the Bank of Korea (BOK) in five months following a similar move in October and it said in a statement that the economy is suffering from slow demand and lack of confidence among businesses and consumers.

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