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INSTANT VIEW 1-S.Korea cuts rates to boost economy, as expected

SEOUL, Oct 11 (Reuters) - South Korea's central bank cut interest rates for the second time in four months on Thursday, as expected, in a bid to boost demand so as to help Asia's fourth-largest economy through a global slowdown.

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

******************************************************** KEY POINTS: - Full story - CHRONOLOGY on changes in the policy rate

- Reuters survey: 22 out of 24 analysts surveyed predicted the Bank of Korea would cut the rate in October, whereas the remaining two saw no change.

COMMENTARY: N A JUNG-HYEOK,ECONOMIST,IBK SECURITIES

"One more cut will be possible this year. But I think the cycle of rate cuts will t hen l ikely be over this year because next year th ere wi ll be a ne w (g overnment) ad ministration and it would be a burden on foreign exchange rates should the re be e xcessive cuts."

"Also fundamentals in South Korea are not so bad as those in other countries."

MARKET REACTION:

- December futures on 3-year treasury bonds turned lower after the decision, wiping out early gains of 0.19 points, while shares and the won showing a muted reaction.

BACKGROUND:

- Trade powerhouse South Korea has seen its exports and imports fall for many of the past nine months on an annual basis as Europe's protracted debt crisis dented demand there and elsewhere, hurting in return spending within the country.

- The economy now looks set to see quarterly growth in the July-September period come at a similar pace to the second quarter, when the growth plunged to 0.3 percent from 0.9 percent in the first three months of the year.

- Consumer inflation picked up to 2.0 percent on an annual basis in September from a 12-year low of 1.2 percent but stood below the central bank's 3 percent target for most of this year, allowing the authorities to ease policy.

(Reporting by Christine Kim, Se Young Lee; Editing by Choonsik Yoo)

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

Keywords: KOREA ECONOMY/RATES