South Korea's central bank slashed on Thursday its benchmark interest rate by a quarter basis point to another all-time low of 1.5 percent as a growing MERS outbreak sparked concerns over the economy.
It was the first cut since March when the Bank of Korea (BOK) made a surprise 0.25 basis point rate cut, pushing it to a then-record low of 1.75 percent.
The Middle East Respiratory Syndrome (MERS) outbreak has killed nine and infected 122 people in Asia's fourth-largest economy since the first case was reported on May 20.
Local businesses including shopping malls, restaurants and cinemas have reported a sharp drop in sales as people shun public venues with large crowds.
South Korean finance minister Choi Kyung-Hwan has warned repeatedly the outbreak -- the largest outside Saudi Arabia -- could hurt the economy.
"We are concerned about the negative impact of the MERS outbreak to the economy, including shrinking consumption and investment," Choi said Monday.
Growing public alarm over the outbreak also forced President Park Geun-Hye to cancel Wednesday her planned June 14-18 trip to the US.
The South's inflation has remained stubbornly below the central bank's target rate of 2.5 to 3.5 percent for almost three years, prompting concerns over deflation.