The central bank’s monetary policy committee said it would maintain the current rate while monitoring domestic and global conditions, citing persistent volatility in Seoul’s housing market and elevated borrowing levels.
The decision follows four rate cuts since October, which lowered the key rate from 3.25 percent in a bid to revive the sluggish economy.
But housing prices in the capital region have continued to climb, despite government measures introduced in June that capped mortgage loans at 600 million won, or about $432,000. Apartment prices in Seoul rose 0.09 percent in the third week of August.
Household lending also remained high, though the pace of borrowing has eased. Officials said many of the loans currently being processed were approved before the June restrictions, keeping upward pressure on debt.
The widening rate gap with the United States added another layer of caution. South Korea’s benchmark rate trails U.S. rates by a record two percentage points.
Still, the central bank raised its 2025 growth forecast to 0.9 percent, from 0.8 percent, pointing to stronger consumer sentiment following a supplementary budget and progress in trade talks with Washington.
“We project next year’s economic growth at 1.6 percent,” BOK Governor Rhee Chang-yong said at a news conference.
“Looking at quarterly growth rates, we expect low growth to persist through the first half before rising close to potential growth in the second half. Given the likelihood of continued low growth through the first half of next year, there is a high possibility that the rate-cutting stance will be maintained.”
reporter
Kim Dong-young
davekim0807@ajupress.com
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