By Cynthia Kim
SEOUL (Reuters) – South Korea’s central bank governor said on Wednesday he sees headline inflation slowing to just above 3% by the end of this year as price pressures would cool towards the year-end despite uncertainties including global oil prices.
“Our inflation rate will go back to lower range of 3% by the end of this year before converging to our target rate by the end of next year,” Rhee Chang-yong told CNBC on the sidelines of the World Bank-International Monetary Fund annual meetings in Morocco.
Rhee said stabilising prices is the current priority over growth as policymakers need to stay alert against a renewed flare-up in prices.
The Bank of Korea’s inflation target is currently 2%.
The BOK meets on Oct. 19 to determine whether it will keep interest rates steady at the current 3.50% to curb price pressures or resume hiking.
South Korea’s consumer inflation accelerated for a second month to 3.7% in September, above market expectations, supporting prospects of the central bank maintaining its restrictive policy for some time.
(Reporting by Cynthia Kim Editing by Andrew Heavens and Muralikumar Anantharaman)