ⓒYONHAP News

The Bank of Korea(BOK) on Thursday kept its key interest rate at one-point-25 percent.

The central bank's monetary policy board froze the rate a month after raising it by a quarter percentage point amid soaring household debt and growing inflationary pressure.

The BOK slashed its benchmark interest rate by half a percentage point to zero-point-75 percent in March 2020 to boost the pandemic-hit economy. It lowered the rate by another quarter percentage point to zero-point-five percent two months later.

In August of last year, however, the central bank raised the rate by a quarter percentage point to zero-point-75 percent, and subsequently made two zero-point-25 percentage point hikes in November of last year and January.

The central bank apparently opted to avoid making the unprecedented move of raising the rate for the third consecutive time in light of signs of unstable economic recovery resulting from a sharp surge in domestic COVID-19 cases and the Ukraine crisis.

In keeping the rate unchanged, the BOK likely also took into account concerns that a rate hike may further stimulate already-high market rates and drive up loan rates, ultimately weighing further on the fiscal woes of households and the self-employed.

The BOK, meanwhile, raised its inflationary outlook for this year from two percent to three-point-one percent amid a hike in international oil prices.

The last time the bank unveiled an outlook in the three percent range was in April 2012. The bank apparently decided to raise the outlook after taking into consideration the fact that global oil prices have been nearing 100 dollars per barrel since the beginning of the year and as global supply chains continue to see bottlenecks.

The BOK also maintained the real gross domestic product growth rate at three percent for this year.