On Friday, South Korea's central bank made a significant shift in its monetary policy by cutting the key benchmark interest rate for the first time since August 2021. The Bank of Korea reduced the rate by 25 basis points to 3.25 percent, responding to a moderation in inflation, which fell to 1.6 percent in September, below the target of 2 percent. This decision comes after a prolonged period of monetary tightening, during which the bank maintained rates at 3.5 percent following seven consecutive hikes from April 2022 to January 2023. Experts had anticipated that the bank could not postpone a rate cut any longer, especially as concerns about domestic demand persisted. Despite the easing of inflation and a cooling property market, the Bank of Korea had been cautious about reducing rates due to fears of rising household debt and potential threats to financial stability. However, recent measures aimed at curbing household debt have shown signs of effectiveness, contributing to a slowdown in home prices. The central bank has revised its economic growth forecast for the year to 2.4 percent, down from 2.6 percent in the previous year, while also adjusting its inflation outlook to 2.5 percent. Exports are expected to rise by 6.9 percent, and private spending is projected to increase by 1.4 percent, reflecting a mixed economic landscape.