SEOUL, South Korea, May 29 -- South Korea's central bank cut its key interest rate and sharply lowered its growth outlook for the country's economy in 2025, as it moved Thursday to counter US President Donald Trump's tariff hikes and weak domestic demand worsened by recent political turmoil.

Following a monetary policy meeting, the Bank of Korea cut its benchmark interest rate by a quarter percentage point to 2.5 per cent. It was its fourth cut since October, when it began lowering borrowing costs for the first time in years to support a weakening economy.

The bank slashed its 2025 growth outlook to 0.8 per cent, nearly halving its previous projection of 1.5 per cent announced in February.

Share prices jumped, with the Kospi gaining 1....