(3rd LD) BOK freezes rate, lowers growth outlook amid economic uncertainty

SEOUL, Feb. 23 (Yonhap) -- South Korea's central bank on Thursday kept the benchmark interest rate unchanged for the first time in 10 months as worries are growing that aggressive monetary tightening could hurt economic growth.

The Bank of Korea (BOK), however, noted that the rate freeze decision does not mean an end to more than a year of a monetary tightening cycle, saying that most of the policy members want to keep the door open for a further increase going forward.

The seven-member monetary policy board of the BOK held a meeting and decided to hold the benchmark rate steady at 3.5 percent. The decision was not unanimous, with one board member voting for a quarter-point rate increase, according to the central bank.

This marked the first time that the BOK has stood pat following seven straight increases delivered since April last year as it has grappled with inflation.

The central bank also lowered its growth outlook for this year to 1.6 percent from a 1.7 percent rise predicted three months earlier, while revising down its inflation projection from 3.6 percent to 3.5 percent.

"It is forecast that inflation will continue to be above the target level (of 2 percent) throughout the year although it is projected to gradually decrease, and uncertainties surrounding the policy decision are also judged to be high," the BOK said in a statement.

"The board, therefore, sees that it is appropriate to judge whether the base rate needs to rise further while assessing the pace of inflation slowdown and developments in the uncertainties."