South Korea's central bank, Bank of Korea (BOK), Thursday raised a key interest rate for December as an economic preventive measures against inflationary pressure.

In a statement, the BOK's Monetary Policy Committee said it decided to raise the call rate by 0.25 percentage points to 3.75 percent for December based on financial and economic conditions.

Two months ago, the BOK made similar decision to increase the rate by the same margin.

In the statement, the BOK explained it made the decision beyond expectations of local business circle because of "latent inflationary pressures due to the economic recovery and persistently high oil prices. "

"Real estate prices have revealed signs of a rebound in certain areas," added the central bank.

However, the BOK admitted facilities and construction investment are still not sufficient.

The BOK also said economic recovery will continue as "The exports continue to exhibit robust growth and the recovery of private consumption shows solid movements" .

Two days ago, the BOK released "Economic Outlook for 2006", which says South Korea's economic growth will accelerate to 5 percent next year from 3.9 percent this year.

Source: Xinhua