S Korea makes largest-ever interest rate cut

---

SEOUL, Oct 27 (AFP): South Korea's central bank today cut its key interest rate by 75 basis points, the largest reduction in the country's history, to try to protect its economy from the global financial turmoil.
The Bank of Korea (BoK) announced the cut in the benchmark seven-day repurchase agreement rate to 4.25 per cent at a special meeting.
The stock market last week suffered its biggest weekly decline and the won plunged to a 10-year low.
The cut came less than three weeks after a reduction of 25 basis points.
Economists said the size of Monday's reduction indicated the central bank's all-out effort to shield Asia's fourth largest economy from the effects of the global credit crunch.
Local financial markets have been rattled by fears that recent sweeping measures to bolster the banking and construction sectors may not be strong enough.
On Friday the central bank announced that the economy grew at its slowest pace for four years in the third quarter, due to a faster than expected downturn in exports and sluggish domestic demand.
The economy is expected to slow down further next year as exports, which account for about 40 per cent of gross domestic product, battle declining demand in key markets like the United States.
"The larger-than-expected rate cut came as a surprise. The BoK seemed to be making an effort to swiftly stabilise the markets with an aggressive rate cut," Kim Jae-Eun, an economist at Hana Daetoo Securities, told Yonhap news agency.