SEOUL, May 28 (Yonhap) — South Korea’s central bank slashed its policy rate by a quarter percentage point to a record low of 0.50 percent Thursday as the country’s economy is expected to grow at the slowest pace in over two decades amid the COVID-19 pandemic.

The move came a little over two months after the Bank of Korea (BOK) cut the base rate to 0.75 percent from 1.25 percent in its first emergency rate cut since October 2008.’

“Economic growth in Korea has slowed considerably,” the BOK said in its statement on the latest monetary policy decision.

“Consumption has remained sluggish and exports have fallen significantly. While the recovery in facilities investment has been subdued, the correction in construction investment has continued.”

The BOK blamed the COVID-19 pandemic, which it said may continue to hurt the local economy down the road.

“The board expects that domestic economic growth will remain sluggish for some time due to the impact of the COVID-19 pandemic. (Gross domestic product) growth is projected to fall considerably below the February forecast of 2.1 percent to around 0 percent, and uncertainties around the future path of GDP growth are also judged to be very high,” the statement said.

The BOK said it expects the local economy to contract 0.2 percent this year, a sharp cut from the 2.1 percent on-year expansion forecast February.

Such a setback in the growth outlook had widely been anticipated due to sharp declines in the country’s exports, which, together with imports, account for roughly half of its GDP.

South Korea’s exports grew 4.5 percent from a year earlier in February, followed by a 0.2 percent on-year drop the following month.

In April, however, outbound shipments plunged 24.3 percent, leading to the country’s first trade deficit in 99 months.

Against such a backdrop, the state-run Korea Development Institute earlier revised down its own growth outlook to 0.2 percent from the previous 2.1 percent, while the International Monetary Fund forecast a 1.2 percent on-year contraction for Asia’s fourth-largest economy in its latest report published April.’

Thursday’s monetary policy decision is in line with market consensus.

In a recent poll conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency, 12 of 18 experts surveyed anticipated the BOK to further slash the key rate this month. The BOK stood pat in April.

Those who expected a rate cut cited the need to further insulate the economy from the COVID-19 pandemic, which has been spreading at an increasing rate globally since the BOK’s emergency rate reduction, delivered on March 16.

Meanwhile, the BOK said one of its monetary policy board members, Cho Yoon-je, was excluded from Thursday’s vote, due to his ownership of stocks that is currently being reviewed for a possible conflict of interest.

Cho, a former ambassador to the United States, began his term at the seven-member BOK board in April, along with two other new members and a member appointed to a second term.