Bank of Korea Gov. Rhee Chang-yong said on Thursday that capping expectations for a rate cut is vital to better manage rising housing prices and household debt.

Rhee’s remarks came after the central bank announced its key interest rate would remain unchanged at two-point-five percent, in a widely expected move.

He said the rate freeze was deemed appropriate, adding that if real estate prices continue to rapidly rise in the Seoul metropolitan area, it would trigger many problems, starting with the despair of young people, further constraining consumption and growth.

Last year, after freezing interest rates in August, household loan growth slowed, leading to a rate cut in October, but Rhee said he was not sure if such results would be apparent any time soon.

The central bank also weighed risks arising from the United States’ unpredictable tariff policy, Rhee explained, saying South Korea’s future economic growth could change depending on the outcome of negotiations with the U.S.

In particular, he expressed concern that if U.S. tariffs rise and local real estate prices are not managed, the trade-off between financial stability and growth could worsen.

According to Rhee, four out of six members of the Monetary Policy Committee, excluding himself, were open to the possibility of lowering the key rate below the current two-point-five percent.