He also said he does not believe a US rate hike could trigger any immediate foreign capital outflows from South Korea.

His comments came six days after the BOK's monetary policy board unanimously voted to keep the key rate at 1.25 percent, extending its wait-and-see approach for the 11th consecutive month.

In June last year, South Korea's central bank made a surprise rate cut, citing a need to stimulate the lackluster economy amid a prolonged economic slowdown.

In March, the US Federal Reserve raised its key rate by a quarter of a percentage point to a target range of 0.75 to 1 percent. It also signaled that additional hikes would be made in a gradual manner later this year.

Last week, BOK Gov. Lee Ju-yeol vowed not to "mechanically raise" the key rate in case of a US rate hike.

Koh said he is looking closely at South Korea's growing household debt, calling it a key factor in determining the direction of monetary policy.

South Korea's household debt reached a record high of 1,359.7 trillion won ($1,214 billion) at the end of the first quarter, according to data compiled by the BOK. (Yonhap)