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MERS outbreak forces S Korea to cut interest rate
MERS Outbreak Forces South Korea To Cut Interest Rate. South Korea reported a tenth MERS death on Thursday , as the outbreak of the potentially deadly virus forced the central bank to cut its key interest rate to ward off greater economic damage, as retailers report a slump in business.
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Seoul: South Korea reported a tenth MERS death on Thursday , as the outbreak of the potentially deadly virus forced the central bank to cut its key interest rate to ward off greater economic damage, as retailers report a slump in business.
In what has become the largest outbreak of Middle East Respiratory Syndrome (MERS) outside Saudi Arabia, a 65-year-old man died Thursday after being infected with the virus while receiving treatment for lung cancer at a hospital.
Seoul also reported 14 new cases, including the first infection of a pregnant woman. The new diagnoses brought to 122 the total number of confirmed cases in South Korea, the health ministry said. Businesses including shopping malls, restaurants and cinemas have reported a sharp drop in sales as people shun public venues with large crowds.
Bank of Korea governor Lee Ju-Yeol said slowing exports and threats to business from MERS were central to the decision to cut its benchmark rate by a quarter percentage point, to a record low of 1.5 per cent. It was the first cut since March, when the central bank made a surprise cut of 25 basis points.
"The full impact of the outbreak still remains uncertain but we thought it was desirable to act pre-emptively to curb its negative impact on... The economy," Lee said. In a statement, the central bank added: "In particular, we are concerned that economic and consumer sentiment, which had been improving, will worsen rapidly because of the MERS crisis."
The BoK has slashed its forecast for this year's growth twice already, from 3.9 per cent to 3.4 percent in January and again to 3.1 per cent in April. More than 54,000 foreign travellers have cancelled planned trips to South Korea so far this month, according to the Korea Tourism Board.
Hong Kong has issued a "red" alert warning against non-essential travel to South Korea. Seoul says World Health Organization guidelines do not warrant such action. Taiwan raised its travel advisory level for South Korea but stopped short of warning its people against going at all.
Other governments in Asia are urging caution but none has gone as far as Hong Kong in warning against non-essential travel.
