The BOK lowered the key rate by 50 basis points in March in its first emergency move since the 2008 global financial crisis.
The rate cut decision was not in line with market expectations. According to a Korea Financial Investment Association (KFIA) survey of 200 fixed-income experts, 79 percent predicted a rate on hold.
The BOK said in a statement that the global economy has contracted significantly due to a constrained economic activity caused by the COVID-19 pandemic, noting that economic growth in South Korea has slowed considerably.
The bank forecast that domestic economic growth will remain sluggish for some time due to the impact of COVID-19, adding that uncertainties around the future path of gross domestic product (GDP) growth are judged to be very high.
Downside risks to the South Korea economy increased in recent months as the coronavirus pandemic roiled global trade and domestic demand.
Export, which accounts for about half of the export-driven economy, plummeted 24.3 percent in April from a year earlier due to a negative effect from the coronavirus pandemic and cheaper crude oil.
Private consumption weakened as people refrained from outside activity such as shopping, traveling and eating out amid lingering worry about COVID-19.
Credit card spending reduced 5.7 percent in April from a year earlier after sliding 4.3 percent in the previous month. It was the first time since May 2004 that the spending fell for two straight months.
Revenue for department stores retreated 14.7 percent in April, after tumbling 34.6 percent in March and 30.6 percent in February respectively. The revenue continued to fall for the fifth consecutive month.
The discount outlet revenue dipped 0.9 percent last month, but it was slower than the declines of 13.8 percent in March and 19.6 percent in February each.