South Korea's central bank kept its policy rate frozen for July on Thursday, one month after it sent the key rate to a record low to bolster growth in Asia's fourth-largest economy.

In a widely expected move, the Bank of Korea's monetary policy board voted to keep the key rate steady at 1.25 percent.

The board made a surprise rate cut in June after holding the key interest rate steady at 1.5 percent for 11 consecutive months in what many saw as a pre-emptive step to boost local spending, one of two major pillars of growth here.

In the January-June period, the country's consumer prices gained only 0.9 percent from a year earlier, far short of the central bank's 2 percent target for the year.

Thursday's decision was in line with an earlier poll by Yonhap Infomax, the financial news arm of Yonhap News Agency, where all 12 economists surveyed forecast a rate freeze in July, noting a need for the BOK board to gauge the effects of its latest rate cut.

The monetary policy board offered a pessimistic outlook.

"Looking ahead the board forecasts that consumer price inflation will remain at a low level for the time being, and then gradually rise as the effects of the low oil prices diminish," it said in a released statement.

"The board will conduct monetary policy so as to ensure that the recovery of economic growth continues and consumer price inflation approaches the target level over a medium-term horizon," it added.

Exports, also a main growth engine, have fallen every single month since the start of last year.

The board noted the decline in exports may continue for some time, partly due to growing uncertainties in the global market.

"The board forecasts that the domestic economy will sustain its trend of modest growth going forward, owing chiefly to expansionary macroeconomic policies, but in view of economic conditions domestically and abroad, judges the uncertainties surrounding the growth path to be high," it said.  (Yonhap)