By Lee Eun-yul and Cheon Jong-woo
SEOUL, Dec 11 (Reuters) - South Korea's central bank, which slashed its benchmark rate by a record amount on Thursday, will probably cut interest rates by at least 50 more basis points by the first half of next year, a Reuters poll showed.
Nine out of 15 economists and bond analysts surveyed forecast the base rate would fall to as low as 2.0 percent by the end of June next year, while one expected the rate to fall to as low as 1.75 percent.
Earlier, the Bank of Korea cut its base rate
"The interest rates came to a level that I had expected to see next year. The BOK is seen lowering the rate to 2 percent, but nobody can rule out even further cuts," said Choen Min-kyu, an economist at Korea Investment & Securities.
Bank of Korea (BOK) governor Lee Seong-tae told reporters after the rate decision that future policy would focus on lifting the economy and easing a credit squeeze.
"We are on the verge of an emergency situation that may need more drastic policy," Lee said.
South Korea's economy has been losing traction so fast that some economists see it heading into its first recession since the 1997/1998 Asian crisis, while its banks, plagued by a persistent dollar funding squeeze, have turned off the taps for borrowers.
Results of the poll on how low the Bank of Korea's base rate will likely fall by the end of June 2009 (percent): HI Investment & Securities 1.75 Hana Daetoo Securities 2.00 Kiwoom.com Securities 2.00 Korea Investment & Securities 2.00 Nomura International 2.00 Samsung Securities 2.00 SK Securities 2.00 Solomon Investment & Securities 2.00 Daewoo Securities 2.00-2.50 Tong Yang Futures 2.00-2.50 DBS Bank 2.25 HSBC 2.25 Tong Yang Securities 2.25 Woori Investment & Securities 2.25 Dongbu Securities 2.25-2.50 (Editing by Jonathan Hopfner)