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S.Korea to keep accommodative monetary policy in 2016 amid low inflation

Xinhua, January 28, 2016 Adjust font size:

South Korea's central bank said Thursday that it will keep an accommodative monetary policy position this year amid the expected low headline inflation.

The Bank of Korea (BOK) said in an inflation report that the country's consumer price inflation will stay low in the year due to the continued downside risks to demand-side inflationary pressure from economic slowdown.

The supply-side inflationary pressure would not rise this year amid the low crude oil prices.

South Korea's consumer price inflation posted the lowest annualized rate of 0.7 percent in 2015, with 0.5 percent in the first half of last year and 0.9 percent in the second half being recorded each.

The BOK expected 1.4 percent for this year's headline inflation, lower than 1.7 percent estimated in October 2015. It remained below the bank's 2016-2018 inflation target of 2 percent.

Considering the expected economic slump and low headline inflation, the BOK said that it will maintain the trend of easing monetary policy in 2016. Enditem