SEOUL - South Korea's central bank on Tuesday cut its policy rate by a quarter percentage point on the back of a dimmer growth outlook for the Asian economy.

Bank of Korea (BOK) Governor Rhee Chang-yong and other monetary policymakers decided to lower the benchmark seven-day repurchase rate by 25 basis points to 2.75 percent.

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It was in line with market expectations. According to the Korea Financial Investment Association's poll of 100 fixed-income experts, 55 percent predicted the rate cut this month.

The BOK slashed the key rate each by 25 basis points in October and November last year, before putting it on hold in January this year.

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This month's rate cut came after the gloomier growth forecast for the South Korean economy.

The BOK revised down South Korea's growth outlook for 2025 by 0.4 percentage points to 1.5 percent, while the forecast for 2026 was changed to 1.8 percent compared to three months earlier.