South Korea's central bank on Thursday froze its benchmark interest rate at a record low, refraining from altering the rate for 16 straight months.

Bank of Korea (BOK) Governor Lee Ju-yeol and six other policy board members decided to keep the seven-day repurchase rate on hold at an all-time low of 1.25 percent. It has been maintained at the level since June last year.

It was in line with market expectations. According to a Korea Financial Investment Association survey of 200 fixed-income analysts, all of respondents predicted the rate freeze.