Seoul: South Korea's central bank kept its benchmark interest rate unchanged for the second consecutive time Thursday in a bid to ensure financial stability amid persistent concerns about rising housing prices and household debt. In a widely expected decision, the Monetary Policy Board of the Bank of Korea (BOK) held its key rate steady at 2.5 percent during its rate-setting meeting in Seoul.

According to Qatar News Agency, the central bank began its monetary easing cycle in October and has since cut the key interest rate by a combined 100 basis points, with the most recent reduction delivered in May. The on-hold decision also came amid concerns over the widening interest rate gap with the US. The gap has stood at a record high of 2 percentage points since the latest rate reduction by the BOK in May, and a wider gap may increase the risk of a weakening Korean won and potential capital outflows by foreign investors.

Citing the effects of the government's economic stimulus measures, the BOK revised up its economic growth outlook for the country this year by 0.1 percentage point to 0.9 percent.