South Korea's central bank is expected to keep the base rate on hold in September as it measures the policy effect of last month's rate cut and watches out for risks of ballooning household debt, a poll showed Thursday.

All 16 analysts surveyed by Yonhap Infomax, the financial news arm of Yonhap News Agency, forecast the Bank of Korea (BOK) to stand pat on the current policy rate of 2.25 percent at a board meeting on Friday.

The latest result comes after the BOK cut the base rate in August for the first time in 15 months amid mounting government pressure. In a largely expected move, six of the seven members of the BOK's policy board voted for a rate cut.

Moon Woo-sik was the only board member who voted for a rate freeze, saying that the country's economy is on a modest recovery track and shifting away from the impact of the deadly ferry Sewol disaster.

Analysts said the central bank is forecast to take time to gauge the impact of its latest policy decision before making additional moves.

"There is no track record of two consecutive rate cuts except in the face of the global financial crisis. Given that the August rate cut was part of policy coordination, the BOK is likely to check the effect of the rate cut ahead of deciding on an additional rate cut," said Shin Dong-soo of NH Nonghyup Securities.

Last month's policy decision was in line with Finance Minister Choi Kyung-hwan's pro-growth initiative. Choi, who doubles as deputy prime minister for economic affairs, in July unveiled a stimulus package aimed at revitalizing tepid consumption and property transaction.

Despite mixed views on the necessity of a rate cut, a clear majority of 21 out of 23 analysts had forecast the BOK to take action in August to lend support to the government's growth drive.

Analysts said the country's bulky household debt is one major area of the economy the central bank will look into before taking further action.

"Mortgage lending growth is already accelerating. We think the BOK would be cautious in making further cuts," said Credit Suisse economist Christiaan Tuntono, forecasting the central bank to hold the rate until the end of the year.

The rate cut, coupled with eased mortgage lending rules, a cornerstone of Choi's stimulus package, is feared to stoke the already-sizeable household credit that hit a record 1.04 quadrillion won (US$1 trillion) at end-June.

Minutes from the Aug. 14 meeting showed that board members also voiced concern over a potential hike in household debt, an issue that has remained a chronic headache for Asia's fourth-largest economy.

Most analysts, meanwhile, expected the BOK to hold the policy rate until the end of the year. A total of 12 analysts expected a rate freeze until end-December, while four forecast a rate cut during the fourth quarter.

"A recovery in domestic demand has been slow, and August's inflation of 1.4 percent is lower than the base rate. Considering that domestic demand is likely to remain sluggish, the central bank is likely to cut the rate once more this year," said Lim Noh-joong, an analyst at I'M Investment & Securities. (Yonhap)