Won hits 20-month low after surprise South Korea rate cut

SINGAPORE (Reuters) - South Korea's won hit a 20-month low on Thursday after the central bank unexpectedly cut its policy interest rate to a record low, joining global policy easing.

The Bank of Korea slashed its base rate by 25 basis points to 1.75 per cent in a surprise move. Most economists polled by Reuters had expected no rate change this week, although many had still predicted a cut in coming months.

The won lost as much as 0.9 per cent to 1,136.4 per dollar, its weakest since July 10, 2013. Treasury bond futures advanced with foreigners buying.

Investors were awaiting Bank of Korea Governor Lee Ju-yeol's press conference later in the day for clues on further rate cuts.

The won may find some relief if Lee indicates the central bank ends its easing cycle, analysts said.

The Bank of Korea's rate cut on Thursday came a day after Thailand's central bank lowered borrowing costs in a surprise move.

Meanwhile, most emerging Asian currencies edged up as investors covered short positions.