Seoul, Oct 2 Inflation is projected to remain stable at around 2 percent, but uncertainties remain high due to the United States' tariff policy and geopolitical risks, the central bank said on Thursday.
Bank of Korea (BOK) Deputy Gov. Kim Woong made the assessment during a meeting to review inflation trends, after government data showed consumer prices rose 2.1 percent on-year in September, returning to the 2 percent range in a month, reports Yonhap news agency.
"The September figure was in line with earlier projections, as the temporary effect of lower telecommunications fees ended. Agricultural, livestock and fisheries prices saw slower growth as improved weather conditions and government price stabilistion measures helped bring farm product prices down," Kim said.
"Looking ahead, prices are expected to remain around the 2 percent level, but the BOK will keep a close watch on inflation trends, given heightened volatility in the exchange rate and oil prices amid uncertainties surrounding U.S. tariff policy and geopolitical risks," he added.
BOK also said on Thursday that it supplied more cash for this year's Chuseok holiday than a year earlier to meet increased demand due to a longer holiday period and lower market interest rates.
The central bank supplied 4.42 trillion won (US$3.15 billion) in new notes to banks and other financial institutions for the past 10 working days from Sept. 19, up 17.9 percent from the amount delivered during last year's holiday season, according to the BOK.
The greater supply came as this year's holiday period, beginning Friday, is longer than usual, falling between two national holidays -- National Foundation Day on Oct. 3 and Hangeul Day on Oct. 9, which celebrates the Korean alphabet.
It also reflected rising demand for cash amid falling market interest rates, according to the BOK.
During the 10-day period, the central bank issued 4.83 trillion won in cash and withdrew 307.8 billion won from circulation, resulting in a net issuance of 4.42 trillion won, it added.
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