SEOUL (Reuters) -Board members of South Korea’s central bank said there was a need to lower interest rates and cited U.S. trade talks as a key factor to consider for the pace and timing of further cuts, at their latest meeting on July 10, minutes showed on Tuesday.
The Bank of Korea kept its benchmark interest rate unchanged at 2.50% at the meeting, but a majority of board members signalled another rate cut in the next three months and warned of “significant” economic uncertainty from U.S. tariffs.
“Uncertainty surrounding the future growth trajectory remains significantly high, particularly due to trade negotiations with the United States,” one member said, arguing the board should maintain an accommodative policy stance to support weak growth.
One member concurred by saying “it is time to consider an additional rate cut”, while another member said “the need for base rate cuts still remains”.
Board members cited developments in the country’s trade talks with the U.S. as a key factor for the future policy path, as South Korean officials scramble to try to clinch a deal that reduces tariffs.
South Korean Finance Minister Koo Yun-cheol said on Tuesday he would seek a mutually beneficial trade deal when he meets U.S. Treasury Secretary Scott Bessent for talks this week, just days before an August 1 deadline expires to avoid punishing tariffs.
(Reporting by Jihoon LeeEditing by Ed Davies)
