Seoul, Feb 26 (NationPress) The central bank of South Korea has decided to maintain its benchmark interest rate on Thursday, attributing this choice to stronger-than-anticipated growth dynamics. The move aims to ensure financial stability in the face of a weakening local currency and a volatile housing sector. In a decision widely anticipated, the Monetary Policy Board of the Bank of Korea (BOK) opted to keep the key rate at 2.5 percent during its recent meeting in Seoul, as reported by the Yonhap news agency.

This marks the sixth consecutive time the bank has opted not to change rates, despite being in a cycle of easing.

Since October 2024, the BOK has lowered the benchmark interest rate by a total of 100 basis points from 3.5 percent to stimulate economic growth, maintaining this rate since May 2025.

The BOK appears to be taking a cautious approach as the economy continues to recover, fueled by strong exports linked to a semiconductor boom.

On this day, the central bank also expressed a positive outlook for the local economy, revising its growth forecast for 2026 upward by 0.2 percentage points to 2 percent.

A significant factor in Thursday's decision was the instability in the property market and the growing household debt levels.

According to recent data from the Korea Real Estate Board, apartment prices in Seoul saw an 8.98 percent year-on-year increase in 2025, the highest growth rate since 2013, when records began.

Despite the government's intensified measures to temper the overheated housing market, the average selling price of apartments in Seoul has continued to rise, with a 0.15 percent increase in the second week of February compared to the previous week.

President Lee Jae Myung has reiterated his strong commitment to stabilizing the real estate market, issuing warnings against property owners with multiple homes, stating, "the root of all problems in this country lies in real estate."

Additionally, the Bank of Korea has raised its growth forecast for this year to 2 percent, citing robust exports and a rebound in private consumption.

This revision represents a 0.2 percentage-point increase from the earlier forecast of 1.8 percent made in November.

The updated forecast aligns with the government's growth predictions and is slightly more optimistic than the 1.9 percent projections by the International Monetary Fund (IMF) and the Korea Development Institute (KDI).

Moreover, the BOK has revised its consumer price inflation forecast for the year, increasing it to 2.2 percent from 2.1 percent due to rising global oil prices influenced by geopolitical tensions.