Bank of Korea Cuts Base Rate By 50 Basis Points

January 9, 2009

A fifth rate cut since October 9th has been engineered. It’s 50-basis point size met expectations and brought the cumulative drop to 275 basis points. In a statement released by monetary officials, rapidly declining growth on all fronts, a continuing credit crunch, and a likely continuing drop in goods and real estate prices were cited for today’s action. Fund-raising difficulties for corporations were also mentioned in a statement that left open the option of further easing “to improve liquidity conditions and to ward off the risk of a severe slowdown in economic activity.”

After the central bank announcement, producer price data were released, showing a 1.7% drop in December on top of a 2.3% decline in November. On-year PPI inflation fell to a ten-month low of 5.6% from 7.8% in November and 11.3% in the year to September.


One Response to “Bank of Korea Cuts Base Rate By 50 Basis Points”

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