SEOUL, Jan. 8 (Xinhua) -- South Korea's central bank on Friday announced to keep the key interest rate at a record low of 2 percent for the 11th consecutive month, citing lingering uncertainties in the growth path.

    The Bank of Korea (BOK), in its monthly monetary policy meeting, decided to leave the benchmark seven-day repo rate frozen at a record low of 2 percent, as widely expected by local experts and media.

    "Domestic economic activity has continued on a recovering trend on the back of brisk exports and domestic demand, but there still remains uncertainty as to the economic growth path due to the risk of delay in a full-fledged recovery of the major advanced economies," the BOK said as it explains the background of the decision.

    "We are taking a cautious policy stance as it is still uncertain whether the economy will get back on track or move into a different direction," BOK head Lee Seong-tae told reporters after the meeting.

    The BOK was widely expected by local analysts to keep the rate frozen at the current level due to uncertainty factors over a global economic recovery, the weakening local currency, and the unstable job market, media reports have said.

    The BOK slashed the rate by a total of 3.25 percentage points between October 2008 and February in a bid to pull the sluggish economy out of the global economic downturn.

    Thanks to efforts by the government and the central bank, the economy has lately been showing signs of recovery, with its third-quarter gross domestic product (GDP) rising 0.9 percent from a year earlier.

    In December, the government and the BOK have revised up their earlier growth outlooks for 2010, with the finance ministry expecting a 5 percent growth and the central bank forecasting a 4.6 percent gain.

    With the economy emerging out of the worst phase of the downturn, a possible hike in the key rate has been discussed in the market due to accelerated inflation and housing price growth.

    Despite diverse speculation on the right timing of an interest hike, the BOK reiterated its earlier stance to keep the rate as status-quo for the time being.

    "The Committee will maintain the accommodative policy stance for the time being in such a way as to help sustain the trend of recovery in economic activity," the central bank said.

    BOK Governor Lee Seong-tae, however, emphasized that the rate was only an emergency measure, also saying a 2-percent interest rate is far deviated from a normal level.

    "The rate should return to a normal state sometime later, although we cannot be sure of the exact timing," the governor said.     　

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