The popularity of high-risk bets among investors looking to cash in on South Korea's artificial-intelligence boom has caused concern at the central bank.

A surge of investment in leveraged exchange-traded funds tied to tech titans like Samsung Electronics and SK Hynix generated significant volatility in the domestic stock market, the Bank of Korea said, calling for stronger oversight of risky financial products.

"Leveraged investment targeting domestic stocks expanded not only domestically but also in international financial markets, creating unexpected spillover effects," the central bank said in a report Thursday.

Overseas financial products linked to major South Korean companies open additional channels through which global trading can affect domestic markets, the BOK said.

In the first half of the year, the value of Hong Kong-listed ETFs linked to Samsung and Hynix, for example, jumped more than 20-fold.

The Korean market's over-concentration in semiconductors also amplified volatility, the BOK said. Samsung and Hynix together account for roughly half of the benchmark Kospi index's market capitalization.

From January through June, the two chip makers drove about 77% of the Kospi's gains, the BOK said. As the Kospi jumped from 8000 to above 9000, their contribution to market swings rose to 99%, it added.

Another destabilizing element on the BOK's radar is a potential resurgence of foreign-exchange volatility stemming from changes in the Federal Reserve's rate path.

The won experienced sharp bouts of depreciation earlier this year, whipsawed by geopolitical headwinds that pushed up the dollar, concerns about domestic growth and rate differentials with the U.S.

Following back-to-back BOK rate increases in July and August, the won has regained some ground. Last month, it reached the strongest levels in 13 months against the greenback.

In the report, the BOK reiterated that it stands ready to tighten further if needed.

"The domestic economy is expected to maintain solid growth, while inflation is likely to remain above the target for a considerable period," it said, flagging financial stability risks from rising home prices in Seoul and growing household debt.

Policymakers also underscored the need to stay vigilant to the potential spillover of the semiconductor boom into inflation via the wealth effect as wages go up and consumers spend more.

The Bank of Korea's next rate-setting meeting is set for Oct. 22.