MERS Outbreak Forces South Korea to Lower Interest Rates

In response to the outbreak of MERS, with 14 new cases reported and its impact on South Korea's economy, the central bank of the country has lowered interest rates to stabilize and strengthen the market. Reuters reported on Thursday, June 21, that the South Korean government hopes this action will revive the economy, which is under pressure from declining demand. The MERS outbreak in South Korea, which has infected 122 people and caused 9 deaths, has raised regional concerns about the transmission of the disease, prompting Hong Kong to test dozens of individuals returning from South Korea, revealing 9 cases of MERS. Meanwhile, many have canceled their travel plans to South Korea. The outbreak of Middle East Respiratory Syndrome (MERS), considered one of the worst coronavirus-type viruses, has disrupted many economic activities within South Korea. Since the outbreak of this disease in 2012, according to official reports published by the World Health Organization, at least 1,271 people have been infected and 448 have died. It is said that this virus originated in Saudi Arabia. The presence of the MERS virus was first discovered in South Korea three weeks ago after a 68-year-old woman returned from the Middle East on the 20th of last month. In addition to the infected patients, 2,500 people are under quarantine and nearly 2,000 schools have been closed publicly in the metropolitan area of Seoul and Gyeonggi Province, the province surrounding the capital. South Korean President Park Geun-hye, who was scheduled to make a business trip to the United States, has canceled the trip to consider measures for the outbreak of this virus, which has increasingly claimed victims. In this context, the central bank of Asia's fourth-largest economy announced on Thursday that it has lowered the interest rate to 1.5%, the lowest record in the country's history. The head of the South Korean central bank stated that this decision is a preventive measure to prevent the country's economic growth from declining due to the MERS outbreak. The report mentions the closure of 2,700 schools and universities, but the presence of World Health Organization experts on Wednesday and their statement that the likelihood of virus transmission from schools and universities is low was a positive sign for the country's return to normalcy. Additionally, the leader of the ruling party in South Korea stated, 'We must put aside the fear and psychological anxiety caused by MERS and return to our normal lives next week to minimize the economic repercussions of this disease.' MERS is considered the most dangerous disease after the SARS respiratory illness that spread in Asia in 2002 and 2003, causing 800 deaths. Hong Kong recently sounded a 'red alert' for those planning to travel to South Korea, and Singapore airports have stated that they will not impose financial burdens on those who cancel their trips to South Korea. In China, a South Korean citizen infected with this disease has recently been identified and is currently being kept in quarantine. The Chinese government has stated that there is no cause for concern and that necessary measures to combat the MERS virus are in place.