The central bank has kept the key interest rate steady at three-point-five percent for the 13th consecutive time since February 2023 citing concerns regarding household debt and home prices.

Thursday's decision by the Bank of Korea’s(BOK) Monetary Policy Board maintains a record two percentage point gap with the U.S. Federal Reserve's rate.

The BOK has maintained the key rate for 19 months and nine days, a record both in terms of consecutive rate freezes and duration since the establishment of the central bank. 

The rate freeze comes amid soaring household debt and housing prices. 

Bank of Korea Governor Rhee Chang-yong told reporters following the board meeting that the central bank feels it must keep an eye on housing prices to ensure a long-term growth for the nation’s economy.

Rhee added that four out of six members of the board excluding himself were open to a potential rate cut in the next three months, up from two members in July.

According to the Korea Real Estate Board, housing prices in Seoul rose zero-point-76 percent in July, the largest monthly gain in four years and seven months. 

Outstanding household loans from the country’s major banks came to 719-point-nine trillion won as of last Wednesday, surging by over four trillion won in just two weeks.
  
Meanwhile, the central bank also lowered the nation’s economic growth outlook for this year to two-point-four percent from two-point-five percent, and the inflation outlook to two-point-five percent from its earlier estimate of two-point-six percent.