SEOUL-- South Korea's central bank said Thursday it will gradually adjust its monetary easing as it seeks to meet its inflation target of 2 percent for this year amid signs of a robust recovery from the COVID-19 pandemic.

In a regular monetary report, however, the Bank of Korea (BOK) said the timing of another rate hike will depend on a resurgence of COVID-19 infections and risks of financial imbalances.

The BOK will "gradually adjust the degree of monetary easing as consumer prices are expected to stay above 2 percent for the time being," the BOK said in the report.

The central bank delivered its first pandemic-era rate hike on Aug. 26 to tackle rising inflation and rein in surging household debts, ending 15 months of record-low interest rates amid signs of improving.

It marked the first rate increase since May last year, when the BOK cut the key rate to a record low of 0.5 percent.

South Korea's household credit grew at a faster pace in the second quarter as non-banking financial firms increased loans.

Household credit reached a record high of 1,805.9 trillion won (US$1.54 trillion) as of June, up 41.2 trillion won from three months earlier, according to the BOK data.

The second-quarter tally compared with a 37.6 trillion-won on-quarter rise in the first quarter.

The growth has shown no signs of letting up as more people have taken out loans to buy homes amid skyrocketing housing prices. Demand for unsecured loans also remains high amid a boom in stock investments.

Source: Yonhap News Agency