Six BOK policymakers vote for 0.25 percentage point rate cut: minutes

SEOUL, Dec. 23 (Yonhap) -- Six policymakers at the Bank of Korea (BOK) voted to cut the key interest rate for November by a quarter percentage point while one sought a bigger reduction in a bid to bolster the slowing economy, according to its minutes released Tuesday.

On Nov. 7, the central bank's monetary policy committee decided to slash the
benchmark seven-day repo rate to 4 percent, marking the third rate cut in a
month.
"As the Korean economy is forecast to pick up its slowdown, affected by a global
economic slump and financial turmoil, the BOK needs to continue its monetary
easing," one policymaker was quoted as saying during the meeting.
But according to the minutes, only one member, Kang Myung-hun, argued that the
BOK needs to cut the rate by half a percentage point to 3.75 percent.
"The current economic conditions require bold and preemptive actions," Kang said,
adding that to ease a credit crunch, the central bank needs to consider
additional policy options like lowering the reserve ratio.
The BOK joined a round of rate cuts by the U.S. Federal Reserve and other central
banks, designed to minimize the impact of the global financial rout.
In December, the BOK cut the rate by a record full percentage point to an
all-time low of 3 percent, citing sharply cooling economic growth. Since early
October, the BOK has trimmed the rate by a combined 2.25 percentage points.
The South Korean economy grew 0.5 percent in the third quarter from three months
earlier, the slowest expansion in four years, as exports fell amid sluggish
domestic demand.
On Dec. 12, the BOK said the Korean economy is expected to grow 2 percent next
year, down from an estimated 3.7 percent gain this year as a global recession
will likely hurt exports amid stubbornly weak domestic demand.
The local economy expanded a robust 5 percent in 2007.
The next rate review is slated for Jan. 9.
sooyeon@yna.co.kr
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