Bank of Korea Governor Lee Ju-yeol says the bank’s benchmark interest rate has yet to reach the neutral rate level despite Friday's hike.

The neutral rate is the level of interest rate at which monetary policy neither stimulates nor restricts economic growth.

Lee told reporters on Friday that though the rate has been hiked on Friday, the trend of monetary easing will remain. 

He added that unlike monetary policies, the government’s financial policies were not expansionary, saying he believes they should be managed in an expansionary fashion. 

On whether the latest hike will help slow down surging household debts, Lee said such an effect can be possible if all types of policies go hand in hand. 

Citing that the government is strengthening macroprudential policies and actively implementing ways to stabilize the real estate market, Lee said he believes a combination of such policies will help tackle financial imbalance.