South Korea’s inflation is set to stay at around 5% through the first quarter of next year, the country’s central bank chief predicted on Friday.
“Inflation in the 5% range could continue through the first quarter of next year,” central bank governor Rhee Chang-yong said, responding to a question at a parliament session in Seoul.
“We look at supply and demand [inflationary pressures] but interest rates should increase should inflation stay above 5%.”
Expectations are increasing among analysts for a 50 basis point hike in the key interest rate to 3.00% when the Bank of Korea reviews policy at its October 12 meeting.
Rhee has kept the door open for a continued tightening through the first half of next year, and analysts have predicted the base rate would peak at 3.50% in the first quarter of 2023.
- Reuters, with additional editing from Alfie Habershon