Korea's central bank has cut its key interest rate for the second time in three months in efforts to revitalize the nation's sluggish economy.
The key rate now stands at a record-low of 1.25-percent, last seen in 2017.
And many predict, the rate cut trend is likely to continue for quite some time amid the stagnant domestic and global economies.
Today we go in-depth on BOK's rate cut and prospects of its effectiveness in revamping the Korean economy with Dr. Yang Jun-sok, Professor of Economics at the Catholic University of Korea.
1. Another rate cut implies Korea needs further measures that could help revitalize its domestic economy. Could you first give us an analysis of the Bank of Korea's rate cut?
2. Korea's central bank has been raising its key interest rate since mid-2016, but it seems the key rate is now on a downward trend. How do you gauge the possibility of further rate cuts?
3. The big question is, how effective a rate cut would be in revamping the Korean economy. And I hear there's a limit to a minimum interest rate that can help boost the economy. The minimum interest rate that can help revamp the economy for Korea, if I'm not mistaken, ranges from 0.75% to 1%. Can you explain to us about this minimum interest rate?
4. Sluggish investment and consumption are not the only economic challenges Korea faces. The on-going U.S.-China trade battle and the South Korea-Japan trade dispute are also weighing heavily on Korea's export-driven economy. How much effect do you expect from this month's rate cut?
5. Korea's snowballing household debt is another huge concern here in the nation. What kind of effect would this month's rate cut have on that front?
6. President Moon, for the first time this year, presided over the economy-related ministers' meeting today where he stressed the need for the government's fiscal expansion and boosting investments in construction and Social Overhead Capital developments. Do you think these could be an option?
7. What other economic policies or measures do you think Korea needs at this point?
8. The IMF has lowered Korea's growth forecast for this year to 2% while projecting a 2.2% growth for next year. How do you see this, and what's your growth forecast for Korea next year?