Inflation in South Korea rose again in October, reflecting sustained consumer demand and growing pressure on the central bank to maintain hiking interest rates.
Wednesday’s report from the statistics office showed that annual consumer price inflation accelerated to 5.7% from 5.6% in September, in line with predictions made by economists. The rate of core inflation jumped to 4.8%, much more than the 4.5% economists had predicted.
This outcome highlights the importance of maintaining the Bank of Korea’s (BOK) current monetary policy of tightening. The central bank will meet in three weeks to decide whether to deliver another half-point increase or return to a more moderate pace of 25 basis points.
The BOK has lifted its benchmark by a half-point in two of its last three meetings, aiming to narrow a rate gap with the Fed and halt its currency’s devaluation.