SEOUL, May 24 (Xinhua) -- South Korea's central bank on Thursday froze its benchmark interest rate as it refrained from altering it amid the massive household debts.
Bank of Korea (BOK) Governor Lee Ju-yeol and six other policy board members left the seven-day repurchase rate unchanged at 1.5 percent.
The bank raised the policy rate in November last year to the current rate from an all-time low of 1.25 percent, the first rate hike in almost six and a half years. Since then, the rate has been unchanged.
The rate freeze was in line with market expectations. According to a Korea Financial Investment Association survey of 100 fixed-income experts, 93 percent predicted a rate on hold this month.
The BOK's reluctance to tighten its monetary policy came mainly from the record-breaking household debts.
Household credit, which includes debts from financial institutions such as banks, insurers and savings banks, as well as purchase on credit, stood at 1,468 trillion won (1.4 trillion U.S. dollars) as of end-March, up 17.2 trillion won (1.59 billion U.S. dollars), BOK data showed.
It was the highest figure since the BOK began compiling the data since the fourth quarter of 2002.
The record-low-level borrowing costs encouraged households to purchase new home with borrowed money under previous governments.
The Moon Jae-in government unveiled a set of measures to control speculative investment in the real estate market, but the still low borrowing costs induced households to borrow money for new home.
