Ammon News - The Bank of Korea (BOK) on Thursday kept its key interest rate unchanged at 2.5 percent, citing growing concerns over household debt amid a heating real estate market and a widening rate gap with the United States.

The decision was made during a monetary policy board meeting held at the central bank’s headquarters in Jung District, central Seoul. It marks the third rate freeze this year, following earlier holds in January and April, after the central bank slashed rates four times between last October and May for a cumulative cut of 1 percentage point.

The interest rate gap with the United States remains at a maximum of 2 percentage points, as the Federal Reserve maintains its target rate between 4.25 and 4.5 percent.

The freeze was widely expected by the market. In a survey conducted Wednesday by the Korea Financial Investment Association, 93 out of 100 bond experts forecast the central bank would keep rates steady.

The association noted, “Despite delayed economic recovery, growing uncertainty both domestically and abroad — including instability in the housing market — led to a higher expectation of a rate hold compared to previous surveys.”

Korea JoongAng Daily