The Bank of Korea (BOK) said in its monetary policy report that it will sufficiently maintain the tightened monetary policy stance until the bank is confident that inflation converges into the midterm target of 2 percent.
The BOK has left its benchmark interest rate unchanged at 3.50 percent since January last year.
The central bank noted that it had yet to be confident that inflation would stabilize at the target level amid lingering uncertainty at home and abroad, saying that the hasty change in monetary policy may undermine market confidence and expand the already massive household debt.
Consumer prices advanced 3.1 percent in February from a year earlier after rising 2.8 percent in the previous month.
Core consumer prices, which exclude volatile agricultural and oil products, climbed 2.6 percent last month.
The BOK added that a possibility remained for headline inflation to move apart from core inflation due to supply-side shocks, caused by volatility in global raw material prices and geopolitical risks in the Middle East.
The bank forecast that the South Korean economy would show a modest recovery trend thanks to export growth despite sluggish private consumption.
It cautioned that the faltering housing market could expand credit risks for households with no sufficient capability to repay mortgage loans amid the prolongation of high interest rates.
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