South Korea's consumer price inflation eased in April from its highest level in more than two years, though remained above the central bank's comfort zone for price increases for the fourth straight month.
The consumer price index increased 4.2 percent in April from the same month the year before, the government's Statistics Korea said in a monthly report. The CPI had risen 4.7 percent in March, the highest level since a gain of 4.8 percent recorded in October of 2008.
The Bank of Korea has raised its key interest rate four times since July in a bid to rein in rising prices. Monetary authorities in some other countries, including China, have also been raising rates to try and ease price pressures amid increasing food and gasoline costs.
Inflation has now exceeded the top of the BOK's inflation "tolerance range" for four straight months. That range is plus or minus one percentage point from its inflation target of 3 percent.
The bank's next meeting of its monetary policy committee — which sets the benchmark interest rate — is scheduled for May 13.
"Inflation was lower than expected, due to sequential declines in agricultural food prices," Kwon Goohoon, economist at Goldman Sachs in Seoul, wrote in a report after the release of the April data, referring to cheaper food prices compared with the previous month.
Still, the central bank will remain focused on fighting inflation and will carry out more interest rate hikes, Kwon wrote.
Goldman Sachs now expects the bank to raise its key rate to 3.75 percent by the end of this year from the current 3 percent. The investment bank had previously expected to rate to end 2011 at 3.5 percent.
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