South Korea's inflation rate is rising, supporting the Bank of Korea to maintain interest rates unchanged.

The weakening of the South Korean won has pushed up energy and food costs, leading to an acceleration in consumer inflation in October. This situation reinforces the rationality of the South Korean central bank's decision to pause its easing cycle - the bank is currently focusing on cooling down the overheated real estate market. On Tuesday, the South Korean statistics agency stated that the consumer price index rose 2.4% year-on-year in October, faster than the 2.1% increase in September. This increase not only exceeded the median expectation of 2.2% from a survey of economists, but was also the fastest pace since July 2024. Data shows that the core inflation rate, excluding volatile food and energy items, rose from 2% in September to 2.2%. Both the overall inflation rate and the core inflation rate are now hovering above the South Korean central bank's target level of 2%. At this delicate juncture of the release of the latest inflation data, the South Korean central bank is facing a dilemma - the bank has kept its key interest rate unchanged in the past three meetings. Despite some easing of price pressures in recent months, concerns about asset bubbles and financial stability risks related to household debt have kept policymakers from restarting the rate-cutting cycle that began last October.