South Korea's central bank says it will closely monitor local financial markets after the U.S. Federal Reserve decided to freeze its benchmark rate for the first time in 15 months.

The Bank of Korea held a meeting on Thursday led by Senior Deputy Governor Lee Seung-heon to evaluate the impact of the Fed's meeting on the international and domestic financial market situation.

Lee said that while the U.S. central bank has frozen the policy rate, it is important to note the emphasis by Fed Chair Jerome Powell that further rate hikes are likely by the end of the year while a rate cut is not.

Fed officials suggested further increases may come depending on how close the economy gets to the target of two percent inflation, with two more 25-basis-point hikes possible by the year's end, as the U.S. inflation rate currently hovers around four percent.