South Korean stocks traded nearly unchanged late Thursday morning as the central bank froze the key rate for three months in a row, analysts said.

After swinging between positive and negative territory, the benchmark Korea Composite Stock Price Index edged down 0.13 percent, or 2.54 points, to 1,911.12 as of 11:20 a.m.

The Bank of Korea held the base rate at a record low of 2 percent for January in line with the government's stimulus move to bolster growth.

Last year, the central bank cut the policy rate by 0.25 percent point twice in August and October each.

Financial shares led the decline, with the industry leader Shinhan Financial Group dropping 0.91 percent and KB Financial Group losing 1.09 percent.

Hana Financial Group, however, rose 0.15 percent on optimistic prospect of a merger between its flagship Hana Bank and Korea Exchange Bank.

Samsung Electronics fell 0.52 percent on news reports that the world's largest handset maker has been in takeover talks with Canadian smartphone maker BlackBerry.

The local currency was trading at 1,085.6 won against the U.S. dollar, down 3.4 won from the previous session's close. (Yonhap)