South Korea's central bank chief on Thursday gave a strong signal for a possible rate hike later this month aimed at reducing the adverse effects from years of low borrowing costs.

"Recently, the South Korean economy has pulled off modest growth on the back of exports, but it is now experiencing an imbalance in many sectors as we have put less significance on investment in the future," Bank of Korea (BOK) Gov. Lee Ju-yeol said in a breakfast meeting with business leaders in Seoul.

"It is necessary for us to create an investment-friendly environment and boost business sentiment," he said. "Also, it is the right time (for the central bank) to make efforts to strike a balance in the financial sector."