**Welcoming Stance on Surprise Rate Cut Decision**
The presidential office expressed a welcoming stance on the Bank of Korea’s decision to cut the base interest rate by 0.25 percentage points, stating on the 28th that it will aid in the recovery of domestic demand.
A senior official from the presidential office mentioned, “We respect the decision by the Monetary Policy Committee to lower the base interest rate,” reiterating the sentiment.
The Bank of Korea surprised the market by announcing a rate cut that day. The Monetary Policy Committee decided to lower the base rate to 3.00% at a meeting held at the Bank of Korea’s headquarters in Jung-gu, Seoul, adjusting it down by 0.25 percentage points from the previous rate of 3.25%.
After lowering the base rate by 0.25 percentage points last month, marking a pivot in monetary policy for the first time in three years and two months, this marks the second consecutive cut.
Despite the Korean won-US dollar exchange rate holding steady at around 1,400 won and showing an upward trend, the Bank of Korea’s surprise decision to cut the interest rate is viewed as being due to a darker outlook for the country’s economy and growth prospects.
In particular, as the difficulties of small business owners and self-employed individuals persist without tangible economic recovery, and with ongoing sluggish domestic demand, even in Yongsan, the necessity for a rate cut had been raised. Previously in August, the presidential office had unusually expressed disappointment over the Bank of Korea’s decision to “freeze” the interest rate, prompting controversy over government influence on the central bank.
A presidential office official commented, “Monetary policy decisions are the exclusive authority of the Bank of Korea,” adding, “The decision to cut the rate this time is welcome given the need to stimulate domestic demand.”