The central bank has kept the key interest rate steady at three-point-five percent for the 12th consecutive time since February 2023. 

The decision was made during the year's fifth rate-setting session by the Monetary Policy Board of the Bank of Korea(BOK) on Thursday, maintaining the largest-ever gap of two percentage points with the U.S. Federal Reserve's rate.

The rate freeze comes amid soaring household debt and the continued weakness of the local currency. 

Household loans from the country’s major banks surged by six-point-three trillion won, or about four-point-56 billion U.S. dollars in June, the largest growth in ten months, while the local currency remains weak, standing at around one-thousand-380 won against the U.S. dollar.

A delay in the U.S. Federal Reserve’s rate cuts also appeared to have affected the BOK’s decision.