S Korea cuts interest rate to record low 1.5%

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SEOUL: South Korea’s central bank slashed on Thursday its benchmark interest rate by a quarter basis point to another all-time low of 1.5 percent as a growing MERS outbreak sparked concerns over the economy.

It was the first cut since March when the Bank of Korea (BOK) made a surprise 0.25 basis point rate cut, pushing it to a then-record low of 1.75 percent.

The Middle East Respiratory Syndrome (MERS) outbreak has killed nine and infected 122 people in Asia’s fourth-largest economy since the first case was reported on May 20.

Local businesses including shopping malls, restaurants and cinemas have reported a sharp drop in sales as people shun public venues with large crowds.


South Korean finance minister Choi Kyung-Hwan has warned repeatedly the outbreak — the largest outside Saudi Arabia — could hurt the economy.

“We are concerned about the negative impact of the MERS outbreak to the economy, including shrinking consumption and investment,” Choi said Monday.

AFP

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