Bank of Korea chief warns of Q1 contraction due to coronavirus

Nearly 1,600 people in South Korea have been infected, second only to China

Seoul mask

People wearing masks to prevent walk outside Seoul Railway Station on Wednesday. © Reuters

KIM JAEWON, Nikkei staff writer

SEOUL -- Bank of Korea Governor Lee Ju-yeol said Thursday that the South Korean economy could contract in the first quarter because of the escalating spread of the new coronavirus.

His stark warning came after the central bank surprised markets by keeping its key interest rate at 1.25%. The BOK said a rate cut will only come after it calculates the impact of the virus carefully.

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