FX.co ★ South Korea Inflation Hits 5-Month Low

In January 2026, South Korea's annual inflation rate decreased to 2% from 2.3% in December, marking a continued decline for the second consecutive month and reaching its lowest point since August. This figure largely met market expectations and aligned with the central bank's target, assisted by lower fuel prices and favorable base effects that helped alleviate price pressures. Last month, the Bank of Korea maintained its policy rate at 2.5% and removed indications of potential further easing, though policymakers remain cautious regarding currency volatility and the inflationary impact of a weak won. The most significant price increases were observed in miscellaneous goods and services (5%), food and non-alcoholic beverages (2.9%), furnishings, household equipment and routine maintenance (2.9%), restaurants and hotels (2.8%), and clothing and footwear (2.4%). On a monthly scale, consumer prices rose by 0.4% in January, accelerating from a 0.3% increase in December and in line with consensus predictions.