(2nd LD) Inflation expected to peak around October despite weak Korean won: finance chief

All News 16:07 September 15, 2022

(ATTN: UPDATES last 2 paras as market closes; ADDS photo)

SEOUL, Sept. 15 (Yonhap) -- South Korea's inflation is forecast to peak around next month despite the recent fall in the Korean won, Finance Minister Choo Kyung-ho said Thursday.

"Consumer prices will stabilize, albeit slowly, after reaching a peak around October at the latest, though the won-dollar exchange rate has surged at a fast pace recently," Choo told a parliamentary session.

Consumer prices, a key gauge of inflation, jumped 5.7 percent in August from a year earlier, slowing from a 6.3 percent surge in July, according to the data from Statistics Korea.

The country's inflation has come under upward pressure due mainly to soaring energy and commodity prices caused by the protracted war between Russia and Ukraine.

"There still are concerns over external factors and high oil prices, but I believe that worries about daily consumer prices could somewhat be eased after October," he added.

The minister has predicted that inflation will reach its pinnacle late in the third quarter or early in the fourth quarter if oil prices do not drastically change.

Finance Minister Choo Kyung-ho speaks during a parliamentary session on Sept. 15, 2022. (Yonhap)

The top financial official also said the government "will seek appropriate steps to stabilize the financial market if there is excessive herd behavior or instability grows further" in the latest verbal intervention.

The financial authorities have been closely monitoring the market and reviewing various contingency plans, Choo said, while guarding against excessive anxiety.

The local currency has recently fallen sharply against the U.S. dollar. On Thursday, the Korean won ended at 1,393.70 won against the greenback, down 2.8 won from the previous session, when it had tumbled below the 1,390 won mark for the first time in more than 13 years.

According to analysts, the won's slide is blamed on concerns over the U.S. Federal Reserve's aggressive monetary tightening to curb inflation and its impacts on global economic growth.