The Bank of Korea decided to maintain its policy rate at 3.5 percent for the 12th consecutive session, citing concerns over high household debt and moderating inflation. The central bank has refrained from adjusting the rate since February last year following a series of rate hikes. Despite signs of inflation easing and stronger-than-expected economic growth driven by exports, the bank highlighted uncertainties surrounding inflation trends, currency markets, housing prices, and household debt's impact on financial stability. While it acknowledged the potential for a future rate cut, it emphasized the need to maintain a restrictive monetary policy stance for the time being. The decision was influenced by rising household loans, particularly mortgage loan growth, which has prompted caution from the central bank. Governor Rhee Chang-yong mentioned the expectation of a gradual easing of inflation, with June's consumer price inflation at 2.4 percent. The bank foresees inflation further declining and aims to reach its target rate of 2 percent by the end of the year. Additionally, the bank raised its growth projection to 2.5 percent for the year, reflecting the economy's better-than-expected performance in the first quarter, driven by export recovery and increased construction investment. This decision contrasts with the Federal Reserve's steady benchmark lending rate, as the Fed is anticipated to begin rate reductions in September due to easing inflationary pressure.