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UPDATE 2-S.Korea c.bank cuts rates again to lift economy

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* Base rate cut by 25 bps to 2.75 pct (vs 2.75 pct forecast

* Second cut in four months as economy slows

* Bank of Korea seen lowering growth forecasts on Thursday

* Governor Kim due to hold news conference from 0220 GMT

By Christine Kim and Se Young Lee

SEOUL, Oct 11 (Reuters) - South Korea's central bank cutinterest rates for the second time in four months on Thursday,as expected, to nurture Asia's fourth-largest economy through aglobal slowdown now dragging on for an extended period.

The Bank of Korea's monetary policy committee cut its baserate by 25 basis points to 2.75 percent, a mediaofficial said without elaborating. Governor Kim Choong-soo isexpected to hold a news conference from 11:20 a.m. (0220 GMT).

Many analysts expect the Bank of Korea to stay on hold for aconsiderable period unless the conditions significantlyworsened, as the economy is seen recovering gradually and as itwants to save the policy room for a worse time.

"There will be no more rate cuts this year," said ParkSang-hyun, chief economist at HI Investment & Securities.

"I agree with the finance minister that our economy has hitbottom during the third quarter. However, the most importantfactor is how strongly our economy will recover."

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Analysts' comments Graphic Stories on South Korean economy ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> GROWTH FORECAST SEEN CUT

December futures on three-year treasury bonds gaveup their initial gains following the rate cut, trading down 0.02point at 106.51 by 0123 GMT. The won and local shares

moved little.

The decision, which brought the rate to the lowest in 19months, was in line with the market's expectations: 22 out ofthe 24 analysts surveyed by Reuters had predicted a cut, whilethe remaining two saw no change.

In July, the central bank trimmed the rate by a quarterpoint from 3.25 percent in a surprise move and for the firsttime in more than three years, ending a tightening drive thathad lifted the rate by a total of 125 basis points.

The BOK is the latest authority to join a wave of globalmonetary easing, as central banks look to counter thedebilitating effects of the protracted euro zone fiscal crisis.Brazil's central bank earlier Thursday cut its policy rate by 25basis points to a record low 7.25 percent.

Trade powerhouse South Korea has seen its exports andimports fall for many of the past nine months on an annual basisas Europe's protracted debt crisis dented demand there andelsewhere, in turn hitting local consumer spending.

The economy now looks set to see quarterly growth in theJuly-September period at a similar pace to the second quarter,when expansion plunged to 0.3 percent from 0.9 percent in theJanuary-March period.

South Korea's economy derives just more than half of itsannual output from private consumption but exports wield astrong influence across the economy as households and companiesrely heavily on export income.

Exports fell year-on-year in each of the past three months,and industrial output contracted in each of the three monthsuntil August month-on-month, indicating growth in the thirdquarter would be at a low level.

The Bank of Korea is also expected to lower economic growthforecasts for this year and next later on Thursday as its latestprojection of 3 percent growth made in July for this year iswidely seen as too optimistic.

The International Monetary Fund lowered on Monday its annualgrowth forecast for South Korea's economy for this year to 2.7percent from 3.0 percent. It was part of the lender's revisionof global economic forecasts.

The annual rates of consumer and producer inflation bothrose in September from August but stood far below the centralbank's 3 percent target as the uncertain global economy dampeneddemand locally, allowing the authorities to ease policy.

(Editing by Choonsik Yoo and Eric Meijer)

((christine.kim@thomsonreuters.com)(822 3704 5665)(ReutersMessaging: christine.kim.thomsonreuters.com@reuters.net))

Keywords: KOREA ECONOMY/RATES