SEOUL, July 30 (Yonhap) -- The U.S. Federal Reserve's decision to leave interest rates unchanged in a split vote has heightened uncertainty over the future path of U.S. monetary policy, while persistent Middle East tensions continue to pose risks to financial markets, the Bank of Korea (BOK) said Thursday.

Overnight, the U.S. central bank kept the benchmark interest rate unchanged at the 3.5-3.75 percent range, marking its fifth consecutive meeting without a rate change. Three Federal Reserve governors dissented, favoring a rate hike.

Kevin Warsh reaffirmed the Fed's commitment to its 2 percent inflation target, saying, "Let me reiterate (that) there is no soft inflation target."

"Federal Reserve Chairman Warsh reaffirmed his commitment to price stability but did not provide clear guidance on the future path of monetary policy," Park Jong-woo, deputy governor of the BOK, said during a market situation meeting in Seoul following the Fed's decision.

"As a result, financial markets viewed uncertainty surrounding the Fed's future monetary policy and inflation outlook as having increased, driving long-term interest rates sharply higher."

The BOK said it will continue to closely monitor domestic and external risk factors and assess their impact on South Korea's financial markets and economy, as investor anxiety has increased over concerns about excessive investment in artificial intelligence (AI) and renewed military tensions in the Middle East.

brk@yna.co.kr

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