By SEOUL (Reuters) – South Korea’s monetary policy board members said there was a need to respond quickly and preemptively to a slowing economy, as they decided to lower interest rates for a second straight meeting on Nov. 28, according to minutes released on Tuesday.
“It is deemed more urgent at this time to respond preemptively to downward pressure on the economy,” one member said.
“As rate cuts alone will be insufficient to control the risks at hand, there is a critical need for timely and flexible policy coordination with fiscal policy,” the member said.
Another member said: “Given heightened domestic and global uncertainties, monetary policy should closely examine the nature and impact of economic shocks and respond to them promptly and flexibly.”
Last month, the Bank of Korea’s board members voted 5-2 to lower interest rates by 25 basis points to 3.00%, which was the first back-to-back rate cut since 2009 and against market expectations for a hold.
Board members who dissented from the decision said it was more desirable to assess domestic implications of Donald Trump’s win in the U.S. presidential election and reaction in the foreign exchange market, before making a move.
South Korea’s economic growth is expected to slow to 1.9% in 2025 and 1.8% in 2026, from 2.2% in 2024, according to the central bank’s latest forecasts.