The Bank of Korea (BOK) cut its benchmark interest rate by 0.25 percentage points to 3.0% on Thursday, marking its second consecutive reduction since October and defying market expectations of a hold. The central bank cited the need to bolster growth amid slowing exports, weakening domestic demand and heightened global uncertainties.

The BOK also lowered its GDP growth forecasts, projecting 2.2% growth in 2024 and 1.9% in 2025, down from earlier estimates of 2.5% and 2.2%, respectively. Officials flagged external risks, including Donald Trump’s reelection as U.S. president, which could trigger protectionist trade policies, a stronger dollar and heightened global financial volatility. Moreover, South Korean consumer and business confidence has also deteriorated.