South Korea's central bank cut its key interest rate for the first time in 15 months on Thursday, providing support to an economy dragged down by the shock of a ferry sinking that killed hundreds of teenagers.

The Bank of Korea lowered its policy rate by a quarter percentage point to 2.25 percent.

The bank had kept it unchanged since a rate cut in May 2013.

Analysts had predicted the bank to lower borrowing costs to boost consumer spending, which turned negative due to the shock of the Sewol ferry disaster earlier this year.

Last month, the bank cut this year's growth forecast for Asia's fourth-largest economy to 3.8 percent from 4.0 percent.

Weak domestic spending has been a source of concern.

South Korea's new finance minister unveiled stimulus measures in July to encourage spending by consumers and companies.

The bank was expected to aid the government's stimulus moves as low inflationary pressure gives room for easing.

The sinking in April of the Sewol ferry killed 294 people and left 10 missing, mostly teenagers on a school trip, causing a national outpouring of grief.

Consumer spending shrank in the April-June quarter, hitting its lowest in nearly three years.

1. Bank of Korea governor Lee Ju-yeol chairing monthly monetary policy meeting

2. Lee bangs gavel at start of meeting

3. Various of meeting

4. Lee walking into media briefing room

5. Tilt up of Bank of Korea sign to Lee speaking during briefing

6. SOUNDBITE (Korean) Lee Ju-yeol, Governor of Bank of Korea:

"Today, at the Bank of Korea monetary policy meeting, a monetary policy has been adapted to lower the base interest rate from 2.50 percent to 2.25 percent."

7. Cutaway

8. SOUNDBITE (Korean) Lee Ju-yeol, Governor of Bank of Korea:

"The economic recovery of the US has been on the rise. However, in the European areas, economic recovery continues to show a weakened presence. In the case of newly emerged markets: in China, the flow of economic recovery has continued, but in some nations the economic activity has been in a continual slump, so differences by country have appeared. In the international stock market, because of the influence of geopolitical risks, interest rates and stock prices have fallen, the US dollar has strengthened, and there has been an increase in fluctuation."

9. Wide of Lee giving briefing