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Economy

South Korea cuts key rate to record low 0.5% to fight COVID-19 hit

Central bank slashes economic forecast to contraction of 0.2% this year

The 25 basis point cut has lowered the benchmark rate to its lowest point since the Bank of Korea adopted its current policy system in 1999.   © Reuters

SEOUL -- The Bank of Korea cut its key interest rate to a record low 0.5% on Thursday in a bid to cushion economic damage from the coronavirus pandemic.

Underscoring the scope of that hit, the central bank also forecast that gross domestic product will contract 0.2% this year, a sharp reversal from its previous projection for growth of 2.1%.

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