South Korea’s central bank froze the key interest rate for the 13th consecutive month on Thursday as it measures risk factors at home and abroad amid the country’s moderate recovery trend.

The monetary policy committee, led by Bank of Korea Gov. Lee Ju-yeol, unanimously decided to keep the benchmark seven-day repo rate at 2.5 percent as widely expected.

“Given various indicators, the current rate level seems to be adequate enough to support the recovery trend,” Gov. Lee said in a news conference.

He said the BOK is monitoring the impact of the slackened domestic demand, adding the recovery speed of consumer confidence will be a key factor in its economic outlook.

In a statement, the BOK forecast the Korean economy will continue to recover but noted that weakened consumption following the Sewol ferry accident has weighed on the upward trend.

The central bank said that the monetary policy committee will pay close attention to external risk factors such as shifts in the monetary policies of major economies and closely monitor movements in domestic demand following the ferry accident that left more than 300 people dead or missing.

South Korea saw its gross domestic product jump 3.9 percent on-year in the first quarter, quickening from a 3.7 percent growth three months earlier as demand for tech and petrochemical products rose in Europe and the U.S.

The central bank predicts the local economy to grow 4 percent this year and 4.2 percent next year.

Despite signs of economic recovery, the country’s inflationary pressure has remained tame. Consumer prices jumped 1.7 percent on-year in May, picking up from a 1.5 percent gain in April, but still ran below the BOK’s target band of 2.5 percent to 3.5 percent.

The central bank forecast inflation will gradually rise as industrial product prices and personal service fees are trending higher, but said the overall level is likely to remain low for the time being. The BOK is scheduled to release a revised growth outlook next month. (Yonhap)