South Korean Consumer Prices Jump 3.7% YoY, Fastest Rate in 10Yrs

Source: FT

South Korean inflation has risen at its fastest pace in nearly 10 years, as the country’s consumer price index matched economists’ expectations with a 3.7% YoY in November. KRW USD up +0.01%, KOSPI up +1.57%

• The monthly inflation figure in Asia’s fourth-largest economy topped forecasts of a 3.1% increase and has surpassed the Bank of Korea’s 2% target for 8-straight months.
• In August, South Korea became the first advanced economy in the region to expand interest rates, with the central bank upgrading its benchmark rate to 0.75% from a record low to 0.5%. 
• In a prior week, the rate was increased again to 1%, up by 25 basis points.
• Park Chong-hoon, head of Korea research at Standard Chartered, stated that a weak Korean won, caused by capital outflows, had triggered an increase in prices of imports over the year.
• The Korean economy is facing uncertainty amid supply chain constraints, the recent surge in Covid-19 cases, and an unpredictable presidential election.