South Korea's central bank froze its key rate for the 13th straight session Thursday as household debts continue to increase and inflation keeps slowing down.In a widely expected decision, the monetary policy board of the Bank of Korea (BOK) kept its policy rate unchanged at 3.5 percent.The BOK has continued to stand pat following rate freezes since February last year after delivering seven consecutive rate hikes from April 2022 to January 2023.The central bank said inflation has continued its downward trend and the recovery in domestic demand has been modest.But it still needs to further monitor how recent measures over the housing market are affecting home prices in Seoul and its surrounding areas and household debt, the BOK said in a statement."The board sees that it is appropriate to maintain its current restrictive policy stance," it said, adding that it will also examine the proper timing of rate cuts.Bank of Korea (BOK) Gov. Rhee Chang-yong bangs the gavel to open a Monetary Policy Committ ee meeting at the central bank in Seoul on Aug. 22, 2024. (Pool photo) (Yonhap)Bank of Korea (BOK) Gov. Rhee Chang-yong bangs the gavel to open a Monetary Policy Committee meeting at the central bank in Seoul on Aug. 22, 2024. (Pool photo) (Yonhap)The rate freeze came as household debt runs high in the face of a series of lending rate hikes and with tighter lending rules and inflationary pressure in Asia's fourth-largest economy showing signs of easing.Earlier, the central bank said conditions are ripening for a policy pivot, although it remains vigilant against soaring household loans.The country's top five lenders had already extended 4.18 trillion won (US$3.12 billion) in household loans, mostly home-backed loans, in the first 14 days of this month, already higher than the previous month's 5.5 trillion-won rise.In the second quarter of the year, outstanding household credit reached a record 1,896.2 trillion won, up 13.8 trillion won from three months earlier, rebounding from the previous quarter' s 3.1 trillion-won fall, according to the central bank data."It is essential to assess the impact of government measures concerning the housing market and the increased market volatility because housing prices in the Seoul area continue to rise, and household debt persists in its increase," the central bank said.Shipping containers are stacked at a port in the southeastern city of Busan, in this file photo taken Jan. 1, 2024. (Yonhap)Shipping containers are stacked at a port in the southeastern city of Busan, in this file photo taken Jan. 1, 2024. (Yonhap)South Korea's inflation picked up pace in July on high prices of fruits and petroleum products, though it stayed below 3 percent for the fourth consecutive month.Consumer prices, a key gauge of inflation, rose 2.6 percent on-year last month, compared with a 2.4 percent increase a month earlier, marking the first time in six months that the price growth accelerated."Looking ahead, inflation is expected to continue its slowing trend, owing to the b ase effect from the sharp rises in global oil and agricultural product prices last year and due to modest demand pressure," the bank said.The rate freeze also came as the central bank trimmed its growth projection for the year to 2.4 from its outlook of a 2.5 percent expansion estimate in May.In May, the central bank jacked up its growth estimate to 2.5 percent for the year, up from its earlier projection of 2.1 percent, but slashed the 2025 growth outlook to 2.1 percent from 2.3 percent.The bank cut its inflation outlook to 2.5 percent for the year, from its earlier estimate of 2.6 percent.The country's economy retreated 0.2 percent on-quarter in the second quarter of the year following a 1.3 percent on-quarter advance in the first quarter as weaker domestic demand clouded robust exports.On a yearly basis, South Korea's economy advanced 2.3 percent in the April-June period, slowing from 3.3 percent growth for the first quarter of the year.The contraction was somewhat widely expected due to a base effect.Last year, the economy expanded 1.4 percent, slowing from the previous year's 2.6 percent gain and the 4.1 percent advance in 2021.The central bank's rate freeze followed the Federal Reserve's decision early this month to hold its benchmark lending rate steady at between 5.25 percent and 5.50 percent for the eighth consecutive time.Its chair said a rate cut could be "on the table" as soon as September if conditions are met.Source: Yonhap News Agency