South Korea Cuts Rates As MERS Clouds Outlook; 14 New Cases

A deadly outbreak of Middle East Respiratory Syndrome (MERS) forced South Korea’s central bank to cut interest rates on Thursday as authorities reported 14 new cases.

Worry in South Korea about the outbreak has been reflected across the region with dozens of suspected cases being tested in Hong Kong, though none confirmed, and many thousands of trips to South Korea canceled.

South Korea’s outbreak, with 122 cases and nine deaths, is the largest outside Saudi Arabia and began last month when a 68-year-old South Korean businessman brought the disease back from a trip to the Middle East.

All subsequent infections have been traced to the original patient and happened in health facilities.

President Park Geun-hye has put off a trip to the United States to deal with the disease as the total number of cases rises daily.

The central bank of Asia’s fourth biggest economy said it had to act and cut its policy rate by 25 basis points to a record-low 1.50 percent.

“We decided to cut rates today in a pre-emptive move to contain the economic fallout from MERS,” Bank of Korea Governor Lee Ju-yeol told a media briefing.

Economic policymakers were already under pressure to stimulate the economy as weak global demand and a strong won have dented exports and discouraged spending by consumers and companies.

One positive sign was a fall in the number of South Korea’s schools and universities that have closed.

The total dipped to 2,431 on Thursday from about 2,700 the previous day after a joint team of experts from the World Health Organization (WHO) and South Korea recommended that schools be reopened as they were unlikely to spread the disease.

“We all need to put behind us excessive fear and psychological withdrawal over MERS and try to go back to normal daily lives next week so we can minimize the impact on the economy,” Kim Moo-sung, who heads the ruling Saenuri party, said at a party meeting.

HONG KONG ALERT

MERS was first identified in humans in 2012. Most of the global cases, which number 1,271 according to World Health Organization data, and at least 448 related deaths, have been in the Middle East.

But memories are fresh in Asia of Severe Acute Respiratory Syndrome (SARS), which emerged in 2002-2003 and killed about 800 people worldwide.

MERS is caused by a coronavirus from the same family as the one that caused SARS. It is more deadly than SARS but does not spread as easily, at least for now.

In Hong Kong, a clinic said it was testing two people who had both recently traveled to South Korea. Thirty-one people in Hong Kong who suspected they might have caught the disease have tested negative.

Hong Kong issued a “red alert” advisory on Tuesday against non-essential travel to South Korea while Singapore Airlines said it would waive fees for customers who want to cancel or rebook flights to South Korea.

Despite the fears, only one case has been reported outside South Korea in the current outbreak, that of a South Korean man who traveled to China via Hong Kong after defying a suggestion from health authorities in South Korea that he stay in voluntary quarantine.

Among the new South Korean cases was a pregnant woman who contracted the virus in an emergency ward that has been linked to other confirmed cases, the health ministry said.

The woman’s pregnancy would limit the scope of treatment available, but she was in stable condition, the ministry said. The woman’s parents had previously tested positive for MERS.

Source : Reuters