SEOUL - SOUTH Korea's central bank has cut its key interest rate to a new record low to boost the country's fast fading economy.

The Bank of Korea lowered the benchmark seven-day repurchase rate to 2 per cent from an already record low 2.5 per cent at a regular policy meeting on Thursday.

South Korea's export-driven economy has been hit by declines in global consumer demand. Exports plunged a record 32.8 per cent in January.

Thursday's cut marked the sixth time the central bank has slashed the benchmark rate since Oct. 9. A full percentage point reduction in December was its biggest cut ever.

Asia's fourth-largest economy shrank 3.4 per cent in the fourth quarter of 2008 as manufacturing and exports crumpled in the face of slumping global demand. -- AP