Bank of Korea in Seoul (
Bank of Korea in Seoul (

Bank of Korea (BOK), South Korea’s central bank, surprisingly cuts its key interest rate to 1.75 percent, an all-time low as the nation scrambles to prevent a deflation.

Bloomberg reported that the BOK trimmed the seven-day repurchase rate to 1.75 percent. While unexpected, the rate cut was forecast by two of the 17 economists that Bloomberg surveyed.

The BOK now joins more than 20 other central banks around the world in lowering interest rates so far this year.

On Wednesday, Thailand’s central bank also trimmed its key interest rates.

South Korea’s won weakened 0.4 percent to 1,131.20 per dollar at 10:18 a.m. in Seoul on Thursday after the decision. It’s fallen 3.5 percent against the U.S. currency this year and depreciated 2.1 percent against the Japanese yen. The yield on three-year government bonds has been below the benchmark rate since March 3 and is was last at 1.86 percent.

The central bank lowered its 2015 growth outlook to 3.4 percent from 3.9 percent on January and cut its inflation projection to 1.9 percent from 2.4 percent. It will revise the economic forecasts in April.