S. Korea's BOK Holds Key Rate Steady at 1.25% in December

South Korea's central bank on Thursday held its key rate steady for December to help support growth despite a US rate hike, South Korea's News Agency (Yonhap) reported. 
In a widely expected move, the monetary policy board of the Bank of Korea (BOK) voted to keep the key rate at 1.25%. 
The move represents the BOK's extension of its wait-and-see mode for the sixth consecutive month after sending the key rate to a record low level to stimulate growth in Asia's fourth-largest economy. 
The freeze came hours after the US Federal Reserve raised a key interest rate by a quarter of a percentage point to a target range of 0.5% to 0.75%. 
Fed Chair Janet Yellen said that the Federal Open Market Committee judged that a modest increase in the federal funds rate is appropriate, citing solid progress toward its goals of maximum employment and 2% inflation. 
"We continue to expect that the evolution of the economy will warrant only gradual increases in the federal funds rate over time to achieve and maintain our objectives," Yellen said in a news conference on Wednesday. 
The BOK monetary policy board said it forecasts that the domestic economy will sustain its trend of modest growth going forward, but judges that the downside risks to the future growth path have expanded a bit, owing chiefly to the high degrees of uncertainty in recent domestic and external conditions. 
The board said, "(It) will closely monitor the uncertainties in domestic and external conditions and their effects, the progress of monetary policy normalization by the US Federal Reserve, and the trend of increasing household debt." The BOK's freeze came amid concerns over South Korea's growing household debt, one of the highest levels in the world compared with income levels. 
South Korea's overall household debt reached a record high of 1,295.8 trillion won about (US$1.09 trillion) as of end-September, according to official data.