![The Bank of Korea BOK Governor Rhee Chang-yong hitting the gavel in a Monetary Policy Board held in Seoul on August 22 2024 Courtesy of the Bank of Korea](https://image.ajunews.com/content/image/2024/08/22/20240822101301965620.jpg)
The Bank of Korea's (BOK) Monetary Policy Board decided to freeze its seven-day repurchase rate for the 13th consecutive time since February 2023, marking the longest-ever streak of rate holds.
The decision was widely expected. Despite BOK Governor Rhee Chang-yong's recent hints in July of a potential pivot, experts believed the current economic climate did not warrant an immediate rate cut.
"The central bank is unlikely to lower rates hastily due to instability in the real estate market," said Park Jeong-woo, an economist at Nomura Securities.
Housing prices in Seoul rose 0.76 percent in July from the previous month, the highest increase in four years and seven months.
Household debt continues to grow, with the five major banks reporting a 4.18 trillion won ($3.13 billion) increase in household loans in the first two weeks of August alone.
Analysts anticipate that if the U.S. Federal Reserve initiates rate cuts in September as markets expect, the BOK may follow suit as early as October.
"We view the probability of a U.S. rate cut in September as nearly 100 percent. If the U.S. lowers rates, the BOK is likely to conclude with a single 0.25 percentage point cut in either October or November this year," said Joo Won, head economist at Hyundai Economic Research Institute.
Also on Thursday, the central bank lowered its economic growth forecast for the year from 2.5 percent to 2.4 percent, in light of July data that showed a 0.2 percent contraction in the nation’s gross domestic product (GDP) during the second quarter compared to the previous quarter.