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S. Korea inflation rises slightly

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(Globalpost/GlobalPost)

South Korea's inflation rate rose slightly in January but remained comfortably below the bottom band of the price rise target set by the central bank, official data showed Friday.

The consumer price index gained 1.5 percent from a year ago, compared to a 1.4 percent increase in December, according to Statistics Korea.

It marked the third straight month that inflation has remained in the 1.0-2.0 percent range since November when it fell to 1.6 percent from 2.1 percent the previous month.

Core inflation, which excludes volatile energy and food prices, stood at 1.2 percent in January from a year ago -- unchanged from the December figure.

The central Bank of Korea has set a target inflationary band of 2.5-3.5 percent.

As long as the actual rate remains below that band, pressure will remain on the bank to consider another interest rate cut to give the economy an extra boost.

The economy grew 2.0 percent for the whole of 2012 -- the slowest pace in three years -- compared to 3.6 percent growth in 2011.

The central bank cut its key interest rate by 25 basis points twice in 2012 -- the last time on October. The benchmark seven-day repo rate currently stands at 2.75 percent.

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http://www.globalpost.com/dispatch/news/afp/130131/s-korea-inflation-rises-slightly