During its monetary policy meeting on Tuesday, the Bank of Korea froze its benchmark rate at point-seven-five percent.
The BOK explained that it made the decision after taking market conditions into account.
"The local financial market has been significantly affected by the volatility in the global financial market. For instance, China's growth has slowed down with concerns over the energy crisis, and with this, other emerging markets have also shown a sluggish recovery."
After a long wait, the central bank raised the key rate by point-two-five percentage points in August.
It was the first raise since November 2018.
The hike was mainly aimed at tackling the country's huge household debt problem and the overheated housing market, which has skyrocketed due to an excessive amount of liquidity.
Even though the bank kept its key rate steady this time in October,… it 's widely expected to be raised in the near future.
"Next year, the economy is forecast to have solid growth and inflationary pressure is to be stronger than previously expected. Thus, the current monetary easing policy will be adjusted and if the economic situation flows as expected, there could be an additional hike in the key rate."
But a rate hike will increase the burden on indebted households and companies small business owners in particular.
"It has been 17 years since I opened this restaurant and the revenue these days is at a record low. 1.5 million won per month is going out of my bank account to pay both the interest and the principal of the loan provided for small business owners. I'm having difficult time because the interest that I have to pay is rising as it was loaned out with a variable rate."
"About 20 percent of South Korea's citizens are small business owners and they have been suffering financially due to COVID-19 during the last two years. It would be a good idea to exempt a certain amount of loan payments or extend the maturity of the debt."
He also stressed that fiscal policies dedicated to a select groups who really need to take out loans including those who need funds to pay rent, as well as first home buyers, would be necessary.
Eum Ji-young Arirang News.