SEOUL (Reuters) – One of the Bank of Korea’s board members said on Thursday that core inflation should be watched more closely than the headline indicator for the time being to better assess changes in inflation pressure.
“It would be good news if inflation (eases) along the Bank of Korea’s expectations, but I personally think we need to watch core inflation more closely in the future,” Park Ki-young said during a discussion session with reporters.
The session was arranged for reporters on the subject of communication strategies by the central bank, but he answered a few questions at the end of the session.
He made the remarks after saying that even if the consumer price index (CPI) growth slows by a big margin in the near future, it would be because of the disappearance of some factors that played a role a year earlier.
He said he had not thought about a turn in the central bank’s monetary policy stance toward easing from the current tightening mode.
The South Korean central bank’s seven-member monetary policy board sets the policy interest rate at eight meetings a year. It held the rate steady at 3.50% at the latest meeting in February after a year of successive increases.
South Korea’s headline consumer inflation for February eased to its slowest pace in 10 months, at 4.8% year-on-year. Annual core inflation, which excludes volatile food and energy prices, inched down to 4.0%, from 4.1% a month before, and hit the lowest since August, suggesting easing underlying price pressures.
(Reporting by Choonsik Yoo; Editing by Kim Coghill)
