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South Korea Sept inflation slows to 7-mth low on farm, oil products

[SEOUL] South Korea's annual inflation in September eased to its lowest in 7 months on the back of weaker farm and crude oil products, data showed on Tuesday, giving the central bank ample room to cut rates if needed.

The consumer price index inched up 1.1 per cent in September from the same month last year, Statistics Korea data showed, compared with a 1.4 per cent rise in August and falling short of a median 1.5 per cent gain tipped in a Reuters survey of 15 analysts.

The annual gain was the slowest since a 1.0 per cent rise in February this year.

On monthly terms, the index slipped 0.1 per cent in September, compared to a median 0.2 per cent gain from the same survey and a 0.2 per cent rise in August.

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Annual core inflation, which strips out volatile agriculture and oil products prices, slowed to 1.9 per cent in September from 2.4 per cent in August. This too, was the slowest increase seen since February.

South Korea's annual inflation has stood far below the lower end of the Bank of Korea's 2.5 to 3.5 per cent target band since June 2012 due to benign global commodities prices and soft domestic demand.

The central bank, which cut interest rates in August to 2.25 per cent, expects inflation to rise to the 2-per cent range next year as the economy recovers. - Reuters