Central Banks

South Korea central bank cuts interest rates to boost economy

Was Bank of Korea's rate cut necessary?

South Korea's central bank cut its policy interest rate for the second time in three months on Wednesday, in line with the market's expectations, aiming at adding momentum to an economic recovery that is proving slow to take off.

The Bank of Korea's monetary policy committee cut its base rate by 25 basis points to 2.00 percent, a media official said without elaborating.

Governor Lee Ju-yeol is due to hold a news conference from 11:20 a.m.

Read MoreChoinomics - Breakthrough for South Korea?

Of the 30 analysts polled by Reuters, 18 forecast the Bank of Korea would cut its policy rate at Wednesday's meeting, while the rest saw a hold.

Wednesday's move brought the monetary policy rate to the lowest since the middle of 2010. The government has been widely seen as pressuring the central bank to keep lowering rates to boost the economy after Finance Minister Choi Kyung-hwan took office in July.