Anchor: South Korea's central bank has left the benchmark rate unchanged at three-point-five percent for the fourth consecutive time. The bank cited inflationary pressure, household debt and a slower recovery in China as the reasons for its decision.
Choi You Sun reports.

Report: The Bank of Korea(BOK) has decided to freeze the key interest rate at three-point-five percent.

The central bank's monetary policy board convened the year's fifth regular rate-setting meeting on Thursday and decided to hold the rate steady for the fourth consecutive time, having last raised the rate in January of this year for the seventh straight time since last April.

The BOK cited a forecast projecting inflation to climb back above three percent after recently dropping to the two-percent range, the rising household debt and slower-than-expected recovery in China as factors that contributed to the decision.

BOK Governor Rhee Chang-yong said discussion on a rate cut could begin once there is certainty that inflation is stably in the two-percent range, declining to estimate the timing.

He added that all six board members agreed on the need to be open to the possibility of further raising the rate to three-point-75 percent.

The central bank plans to maintain its focus on stabilizing consumer prices while carrying on with austerity.

With the latest rate freeze, the gap with the U.S. Federal Reserve's rate remains at a record high of one-point-75 percentage points, but that could further widen to two percentage points or more should the Fed hike its rate this month.

Meanwhile, the BOK kept its growth outlook for the year at one-point-four percent, expecting exports to improve due to recoveries in the information technology sector.
Choi You Sun, KBS World Radio News.