Anchor: The central bank has left the key lending rate unchanged at two-point-five percent. The freeze, announced Thursday, came in response to soaring housing prices in the capital region and elevated levels of household debt.
Choi You Sun reports.

Report: The Bank of Korea(BOK) on Thursday decided to leave the key interest rate steady at two-point-five percent during the Monetary Policy Board’s fifth policy decision meeting of the year.

The BOK predicted that the domestic economy’s sluggish growth will continue for some time, assessing that the country faces heightened uncertainties in trade negotiations with the United States.

The central bank explained that the rate freeze was necessary considering the increase in housing prices in the capital area, a sharp rise in household debt, and tighter government restrictions on household loans.

The bank, meanwhile, said inflation should remain relatively stable and post around two percent for the entire year.

The outlook comes after inflation edged up to two-point-two percent in June, with core inflation staying at two percent.

Externally, the BOK mentioned uncertainties after the U.S. posted negative on-quarter growth in the April-June period, and as the manufacturing sectors in China and Europe continue to report lackluster performance figures.

It forecast that changes in the global trade environment and the monetary policy moves of major economies will have a significant impact on the world economy.

The central bank said it will comprehensively consider policy conditions at home and abroad, as well as inflation and financial stability, in its next rate-setting decision.
Choi You Sun, KBS World Radio News.