South Korea cuts rates as MERS clouds outlook; 14 new cases

An outbreak of Middle East Respiratory Syndrome (MERS) forced South Korea to cut interest rates on June 11 in the hope of softening the blow to an economy already burdened by slack demand, as authorities reported 14 new cases.

Worry in South Korea about the disease has been reflected across the region with dozens of suspected cases being tested in Hong Kong, though none confirmed, and many thousands of people cancelling trips to South Korea. 

South Korea's outbreak, with 122 cases and nine deaths, is the largest outside Saudi Arabia and began last month when a 68-year-old South Korean businessman brought the disease back from a trip to the Middle East. 

He was diagnosed with MERS on May 20 and all subsequent infections have been traced to him, and happened in health facilities. 

President Park Geun-hye has put off a trip to the United States to deal with the disease as the total number of cases rises daily. 

The central bank of Asia's fourth biggest economy said it had to act and cut its policy rate by 25 basis points to a record-low 1.50 percent. 

"We decided to cut rates today in a pre-emptive move to contain the economic fallout from MERS," Bank of Korea Governor Lee Ju-yeol told a media briefing. 

Economic policymakers were already under pressure to stimulate the economy as weak global demand and a strong won have dented exports and discouraged spending by consumers and companies. 

One positive sign was a fall in the number of South Korea's schools and universities that have closed. 

The total dipped to 2,431 on Thursday from about 2,700 the previous day after a joint team of experts from the World Health Organization (WHO) and South Korea recommended that schools be reopened as they...