The central bank has kept its key interest rate steady at two-point-five percent.

After its Monetary Policy Board held a rate-setting meeting Thursday, the Bank of Korea(BOK) announced the decision to freeze its key lending rate.

The BOK explained that although the economy is showing some signs of improvement, mainly driven by domestic demand, it is necessary to more closely monitor trends in household debt and housing prices in the Seoul metropolitan area.

The central bank said it will maintain a monetary easing stance to reduce downside risks, adding that it will set rates after closely monitoring changes in domestic and international policies, as well as the trends in prices and financial markets. 

The BOK lowered the benchmark interest rate by zero-point-25 percentage point in October last year and again in November, then made additional 25 basis point cuts in February and May this year, but kept it at two-point-five percent in July.