A South Korean central banker on Wednesday indicated the need for policy rate increase as the benchmark rate stayed below a so-called neutral rate.

Shin In Seok, one member of the seven-member monetary policy committee of Bank of Korea (BOK), said at a meeting with reporters that the current policy rate of 1.25 percent was low enough to hover below the neutral rate.

The neutral rate refers to a benchmark interest rate which neither stimulates economy nor deters inflation.

His comments were in line with BOK Governor Lee Ju-yeol's indication in June of the need for less accommodative monetary policy.

The central bank cut its policy rate to the current level in June last year. The rate neared a range of 1.00-1.25 percent set by the U.S. Federal Reserve as its benchmark rate.