South Korea's central bank is likely to hold its key rate steady this month as soft domestic demand could keep monetary policy accommodative in the near term, a leading provider of economic analysis said Saturday.
The Bank of Korea (BOK) is set to hold its rate review session Thursday to decide whether to keep or adjust the all-time low rate of 1.25 percent.
Still, Moody's Analytics said in a report that the South Korean government's stimulus measures such as the proposed 7.1 percent on-year spending increase in the 2018 budget and concerns about record high household debt "could prompt a faster than expected rate hike cycle next year."
South Korea's overall household debt came to 1,388.3 trillion won (US$1.22 trillion) as of end-June, up 10.4 percent from a year earlier, according to data compiled by the BOK.
In June, BOK Gov. Lee Ju-yeol said the central bank may take a monetary tightening approach if the economy shows signs of a robust recovery. (Yonhap)