BOK LOWERS KEY INTEREST RATE

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Amid growing concerns over a global economic recession, the Bank of Korea has slashed its key interest rate to a record low to cushion the economic blow from the coronavirus epidemic. This is the first time the nation's base rate has dipped below one percent.

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The Bank of Korea held an emergency meeting of its monetary policy board on Monday. In less than 20 minutes into the meeting, the central bank decided to cut its benchmark interest rate by a half of a percentage point to 0.75 percent. As a result, the nation's policy rate has been lowered to a range of zero for the first time. This is the third time the BOK held an emergency meeting to decide on rate cuts. The two previous ones were only arranged in the wake of the September 11 terrorist attacks in 2001 and the global financial crisis in 2008. Therefore, the BOK's latest move indicates how grave the current situation is.

[Soundbite] LEE JU-YEOL(BOK GOVERNOR) : "The spread of the novel coronavirus is far faster and more intense than expected. It is now affecting a large number of countries. Therefore, the epidemic is predicted to cause a prolonged, serious economic blow."

The central bank also announced measures to increase the supply of liquidity to the financial market. It decided to lower the interest rate on its Bank Intermediated Lending Support Facility to 0.25 percent. The rate is what the BOK charges on commercial banks that give loans to small and medium-sized companies. Therefore, this action is expected to encourage banks to lend more to smaller businesses and alleviate the interest burden of the firms. The central bank will also funnel more funds to banks by buying in their debentures. BOK Governor Lee Ju-yeol predicted that the nation's economic growth will be unlikely to reach the initial goal of 2.1 percent this year. He added that the BOK will implement a monetary easing policy to deal with the worse-than-expected economic situation.