South Korea's central bank is expected to freeze its benchmark interest rate for a second month in May as it continues to monitor major indicators of Asia's fourth-largest economy, a poll showed Monday.

A whopping 12 out of 13 analysts and economists surveyed by Yonhap Infomax, the financial news arm of Yonhap News Agency, forecast the Bank of Korea will hold the base rate steady at a record low of 1.75 percent at its policy meeting on Friday.

Last month, the central bank left the key rate unchanged following a surprise quarter-percentage-point cut in March that marked the third rate reduction in the past year.

The respondents said while an additional rate cut may come as early as June, the central bank is likely to extend its wait-and-see approach for this month, given BOK Gov. Lee Ju-yeol's repeated comments on the economic recovery.

"While the speed of the recovery is weak, we have seen positive signals recently. Consumer sentiment has improved and the property and stock markets are robust," Lee told reporters on April 28.

"The BOK sustains its view that the economic recovery will start gaining traction in the second quarter. Moreover, rapid household debt growth will not lead to an immediate rate cut," said Lim Noh-joong, an analyst at I'M Investment & Securities Co.

Household debt has been on the rise as low interest rates prompted home buyers to borrow more. Household loans extended by local lenders reached 570.6 trillion won ($523.5 billion) as of the end of last month, with the monthly gain roughly three times larger than the same month in previous years. April data has not been released.

Park Hyung-min of Shinhan Investment Corp. echoed the view, citing first-quarter growth figures.

"As first-quarter growth of 0.8 percent met expectations, the government and the central bank are showing positive views about the economy," he said. "While recovery momentum is not strong, a rise in oil and property prices may lead to a recovery in sentiment for expected inflation."

The country's gross domestic product grew 0.8 percent in the January-March period, mostly buoyed by increased construction investment, according to BOK data. It was up sharply from a 0.3 percent on-quarter gain three months earlier.

More than half of the respondents, however, said chances of an additional rate cut continue to linger as economic uncertainties, such as a weakening yen and flagging exports, persist. Seven out of the 13 analysts forecast the central bank to cut the key rate to 1.5 percent next month.

"If exports turn out to be sluggish for a second straight month in May, the central bank may take action in June to prevent low growth from taking hold," said HI Investment & Securities Co. analyst Seo Hyang-mi.

South Korea's exports sank 8.1 percent in April from a year earlier, worsening from a 4.3 percent on-year drop in March.

Five analysts still projected the central bank to hold the key rate at the current level until the end of the year.

"The economy has started to recover since the fourth quarter of last year and household debt is forecast to grow continuously," said Lhee Jung-bum, an analyst at Korea Investment & Securities Co.

"Demand for an additional rate cut is likely to ease against this backdrop." (Yonhap)