The central bank's monetary policy body cited inflation and the Korean won’s weakness against the U.S. dollar for its decision to take another "big step" of a zero-point-five percent hike in the key rate on Wednesday.

After its decision to raise the benchmark rate to three percent, the Bank of Korea's(BOK) rate-setting Monetary Policy Board called for a heightened response amid continued inflation, exacerbated by the weakness in the local currency, and related risks.

The committee forecast inflation to remain in the five- to six-percent range for some time, warning of a significant upward risk stemming from the exchange rate and reduced output by major oil-producing states.

The policy board also projected a greater slowdown in economic growth, missing its two-point-one-percent forecast for next year.

It also emphasized a need to maintain its tighter monetary policy, hinting at further hikes in the future.