SEOUL - South Korea's central bank said Thursday it froze the benchmark interest rate at 3.25 percent for August, following an unexpected rate hike two month earlier, due to heightened uncertainties surrounding debt and growth prospects in the United States and Europe.

The Bank of Korea (BOK)'s decision was in line with market expectations as market watchers forecast the central bank will not conduct a monetary tightening amid strengthened external uncertainties despite the lingering concerns about high consumer inflation.

The BOK has lifted the borrowing costs by a total of 125 basis points in five steps to 3.25 percent since July last year.