BOK voted 61 to cut policy rates to 3.25
Board member Chang Yongsung voted to keep rates unchanged
Six of seven board members back steady rate for next three months

SEOUL, Oct 11 Reuters South Korea39;s central bank cut interest rates for the first time since mid2020 on Friday and flagged there was room to reduce further, giving some relief to households that have faced the highest borrowing costs in 16 years.

The Bank of Korea BOK lowered its benchmark interest rate by a quarter percentage point to 3.25 at its monetary policy review, an outcome expected by 34 of 37 economists polled by Reuters.

BOK Governor Rhee Changyong said Friday39;s decision, which board members backed 61, could be interpreted as a hawkish cut, as financial stability will remain an important policy consideration even as we make this reduction.

From where we stand now, the policy interest rate sits above our neutral interest level by any model, so there is room for further reductions, he said at a press conference after the rate decision.

Rhee offered no specific guidance when asked if the bank will further cut interest rates when it next reviews policy on Nov. 28, but said for the next three months, six out of seven board members favour holding rates steady.

The won gained against the dollar while policysensitive threeyear treasury bond futures extended gains, rising as much as 0.17 point to 105.96.

The rate cut aligns the BOK with central banks in the U.S., U.K., European Union and…