The head of South Korea's central bank said Monday that Seoul is unlikely to suffer any drastic capital outflow, even if the interest rate gap between Korea and the United States is reversed.

Bank of Korea Gov. Lee Ju-yeol made the assessment in a parliamentary audit of the central bank, noting that the inflow and outflow of capital is not determined only by the rate gap.

In June, the US Federal Reserve raised its key rate by 25 basis points to between 1 percent and 1.25 percent, narrowing the rate gap with South Korea. 

Last week, the BOK kept its benchmark interest rate at a record low of 1.25 percent, extending its wait-and-see approach for the 16th consecutive month.

Lee told lawmakers that the impact of a US rate hike, possibly later this year, will not be big, since such a course has already been factored into South Korea's financial markets.

The BOK chief said last week that market conditions are "somewhat ripe" for the BOK to gradually tighten its monetary easing stance, hinting at a possible rate rise in the near future.

"A key rate hike could be considered if the economy shows signs of steady recovery and consumer prices reach the target range," Lee said in the parliamentary session earlier in the day, referring to the target range of 2 percent.

In June, Lee said the BOK may take a monetary tightening approach if the economy shows signs of robust recovery. (Yonhap)