SEOUL, July 18 (Xinhua) -- South Korea's central bank unexpectedly lowered its policy rate on Thursday amid growing worry about trade row with Japan.
Bank of Korea (BOK) Governor Lee Ju-yeol and six other monetary policy board members cut its benchmark seven-day repurchase rate by 25 basis points to 1.50 percent.
It was not in line with market expectations. According to a Korea Financial Investment Association (KFIA) survey of 200 fixed-income experts, 70 percent predicted a rate on hold.
It marked the first rate cut in around three years since June 2016 when the BOK lowered its target rate by a quarter percentage point to an all-time low of 1.25 percent.
As the South Korean economy recovered, the BOK raised the benchmark rate by 25 basis points to 1.50 percent in November 2017, before hiking the rate further to 1.75 percent in November last year.
The central bank reversed its tightening monetary policy direction this month amid the rising concern about trade friction with Japan.
Japan slapped stricter control early this month on its export to South Korea of materials vital to produce memory chips and display panels that influence the manufacturing of smartphones, TVs and other tech products.
Japan's export curbs were forecast to add uncertainties to the already-struggling export of South Korea.
Export, which accounts for about half of the export-driven economy, kept sliding for the seventh consecutive month through June.
The export was already hit by the downturn in business cycle of the global semiconductor industry and the global trade dispute.
