SEOUL – South Korea’s central bank on Thursday lowered its key interest rate for the second straight month and said the country’s economy would grow at a slower pace than initially expected.

Following a meeting of its monetary policy makers, the Bank of Korea cut its benchmark interest rate by a quarter of a percentage point, to 3 percent. The bank lowered its outlook for the country’s economic growth from 2.4% to 2.2% for 2024 and from 2.1% to 1.9% for 2025.

This is the second month in a row that the bank has taken steps to reduce borrowing costs and increase the money supply, despite the lingering effects of high inflation and alarming levels of household debt, as concerns grow as for a faltering economy.

The bank also cut its benchmark rate by a quarter of a percentage point to 3.25% in October, marking its first rate cut since May 2020, when the economy was grappling with the COVID-19 pandemic. .

The bank said the country’s trade-dependent economy faces growing uncertainties over global economic trends and inflation, which could be affected by the policies of the new US government led by Donald Trump and conflicts current geopolitics.

Since his re-election, Trump swore to impose huge new tariffs on foreign goods entering the United States, including those from Mexico, Canada and China, which he says will create more domestic jobs and reduce the federal deficit.

The Bank of Korea said South Korea’s economy was losing growth momentum due to weak domestic consumption, slowing exports and falling employment.

“Going forward, domestic consumption will see a slight recovery, but export recovery is likely to be weaker than initially expected due to intensifying competition and strengthening protectionist trade policies in key sectors,” said the bank in a press release.