South Korea's central bank trimmed the key interest rate Thursday for a second time this year, as Asia's fourth-largest economy faces mounting threats from the protracted debt crisis in Europe and the slowing growth in the world economy.
Market analysts widely predicted the rate cut this month as the latest economic data showed growth in South Korea's economy was losing steam with weakening overseas demand for South Korean goods.
The strengthening of the local currency against the U.S. dollar was also feared to hurt price competitiveness of exporters, adding pressure to South Korea's trade-reliant economy and reinforcing the case for the rate cut.
Analysts expect that the Bank of Korea, which revised down its outlook for South Korea's economy to 3 percent in July, will further reduce its growth forecast for 2012 and 2013 in its scheduled announcement later in the day.
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