S. Korea cuts key interest rates to 2.5% in May meeting amid sluggish growth concerns

South Korea's central bank has slashed its benchmark interest rate by 25 basis points as widely expected, bringing it to 2-point-5 percent.

In its fourth Monetary Policy Committee meeting of the year, the Bank of Korea on Thursday announced a rate cut, after leaving rates unchanged in January and April, and lowering them in February.

The decision comes amid growing economic uncertainty from U.S. tariff policies as well as the stabilization of the won-dollar exchange rate.

South Korea's economy already contracted in the first quarter shrinking by 0-point-2 percent, a sharp downturn from the central bank's February forecast of 0.2 percent growth.

The Bank of Korea also revised down its economic growth projection for this year from 1-point-5 percent to 0-point-8 percent.