The Bank of Korea(BOK) has cut its benchmark interest rate for the second consecutive time in a surprise move that defied market expectations. 

After its Monetary Policy Board held a rate-setting meeting Thursday, the central bank announced that it will lower its key lending rate to three percent, representing a zero-point-25 percentage point cut.

The previous 25 basis point decline on October 11 marked the BOK’s first pivot in over three years. 

The BOK was widely expected to maintain the key rate on Thursday due to concerns about the weakening South Korean currency, the widening gap between the BOK’s rate and the U.S. Fed’s, and rising household debt. 

Its second straight rate reduction apparently reflects concerns about the gloomy economic outlook.
 
In consideration of slowing exports, sluggish domestic consumption, and uncertainties concerning the incoming Trump administration, the BOK lowered its economic growth outlook for this year to two-point-two percent from two-point-four percent.

It also slashed its forecast for next year to one-point-nine percent from two-point-one percent.