The data showed on Wednesday that South Korea's consumer inflation slowed for a second month in September, but economists said it wouldn't change the central bank's bias due to growing talk it could opt for a bigger hike next week.
Economists said the latest data suggested inflation was at or past its peak, but expected the central bank to stick to its stance given the weakening won and aggressive monetary policy in the United States.
The consumer price index CPI rose by 5.6 per cent from the same month a year ago, the data shows it's slowing for the second straight month. In August, inflation cooled to 5.7 per cent, the first slowdown in seven months.
The Bank of Korea could raise the policy interest rate by 50 basis points next week, for the second time on record, despite an aggressive stance by the U.S. Federal Reserve.
I think inflation pressures have already past their peak in South Korea, but the Bank of Korea is not making policy decisions on inflation numbers, but has to consider the U.S. policy and foreign exchange rate, said Moon Hong-cheol, economist at DB Financial Investment.
The CPI's annual growth rate was the slowest in four months and slightly less than economists' median forecast for 5.7 per cent in September, although predictions ranged widely.
The Bank of Korea has raised its policy interest rate by 2.0 per cent since August of last year from record low 0.5 per cent to fight inflation and Governor Rhee Chang-yong has said tightening stance will continue for the time being.
The Bank of Korea's policy board meets on October 12.
The Bank of Korea affirmed at an internal meeting on Wednesday that inflation prospects were uncertain, listing the won and global oil prices as the main drivers of future inflation.
The won has fallen steeply, raising concerns about possible capital flight and rising import prices. The currency has weakened by 16 per cent against the dollar so far this year.
The consumer price index, which strips off volatile food and energy prices, fell month-on-month for the first time in a year, although its annual rate increased to 4.1 per cent from 4.0 per cent in August.