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Investing.com -- South Korea’s consumer inflation saw a slowdown in February, marking the first such instance in four months, according to government data released on Thursday.
This slowdown could provide some respite for policymakers who are aiming to further relax monetary policy.
The Consumer Price Index (CPI) increased by 2.0% compared to the same period last year. This rise is slower than the 2.2% gain observed in the previous month, as reported by Statistics Korea.
The figure slightly exceeded the median prediction of a 1.95% increase from a Reuters poll.
On a monthly basis, the CPI rose by 0.3%, in comparison to increases of 0.7% in the previous month and the 0.2% economists had predicted.
The deceleration in inflation in February follows a six-month high in January, which was propelled by a weak won, exceeding the central bank’s medium-term target of 2%.
The won has gained 2% against the dollar this year, trading at 1,444.2 per dollar on Thursday. This follows a depreciation of over 12% in the previous year, which was the largest fall in 16 years, largely due to domestic political instability.
The Bank of Korea stated after the data release, "Going forward, consumer inflation is expected to fluctuate around the target level amid mixed factors of a weak local currency and low demand pressure."
Last week, the central bank reduced interest rates and indicated that further easing would be implemented this year.
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