UPDATE 4-S.Korea c.bank cuts rates, seen on hold for while

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

* Second rate cut in four months as economy slows

* C.bank slashes 2012-2013 growth forecast

* Most analysts don't expect additional rate cut this year

(Updates after news conference)

By Christine Kim and Se Young Lee

SEOUL, Oct 11 (Reuters) - South Korea's central bank cut interest rates as well as growth forecasts on Thursday, as expected, and its projection of an economic rebound next year affirmed a market expectation it was not likely to ease policy again soon.

Bond prices tumbled as investors took the widely expected decision as a chance to cash in on recent gains while the won

pared losses as the Bank of Korea's views eased concerns about the local economy slipping further down.

The Bank of Korea's monetary policy committee cut its base rate by 25 basis points to 2.75 percent, its second easing in four months, taking the rate to its lowest in 19 months and just above next year's expected inflation figure.

It now sees Asia's fourth-largest economy growing only 2.4 percent this year before picking up to growth of 3.2 percent next year, compared with the previous forecasts set in July for 3.0 percent and 3.8 percent, respectively.

"We believe both economic growth and inflation have hit their bottom in the third quarter and will now head upward, though very slowly," said Young Sun Kwon, economist at Nomura International in Hong Kong.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Analysts' comments Graphic Stories on South Korean economy ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> RECOVERY AHEAD, THOUGH MODEST

December futures on three-year treasury bonds gave up their initial gains and fell 0.07 points on the day to 106.46 by 0427 GMT as the Bank of Korea failed to provide clear indication of an additional cut in the near term.

"The committee expects the pace of global economic recovery to be very modest going forward and judges the downside risks to growth to be large," the central bank said in its policy statement.

South Korea's economy is heavily reliant on exports but Finance Minister Bahk Jae-wan said recently it has probably reached the bottom of its trough in the third quarter.

In the second quarter, private consumption by value was just 1.3 percent above the average for last year and capital investment was 0.5 percent less, in real, seasonally-adjusted, terms, indicating limited room for further decline.

The central bank also lowered the interest rate for its special loan programme for smaller firms to 1.25 percent from 1.50 percent in line with the lower policy rate.

The decision, which brought the base rate close to next year's inflation projection of 2.7 percent, was in line with the median forecast in a Reuters survey of 24 analysts.

In July, the central bank trimmed the rate by a quarter point from 3.25 percent in a surprise move and for the first time in more than three years, ending a tightening drive that had lifted the rate by a total of 125 basis points.

The central bank also set its new inflation target for the 2013-2015 period at between 2.5 percent and 3.5 percent as the previous three-year target of 2 percent to 4 percent expires at the end of this year.

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

(Editing by Choonsik Yoo and Eric Meijer)

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