S.Korea Sept inflation 1.6 yy vs 1.9 forecast
Falls below BOK39;s target for first time since early 2021
Firms rate cut case ahead of policy meeting on Oct. 11

SEOUL, Oct 2 Reuters South Korea39;s consumer inflation cooled more than forecast in September and below the central bank39;s target for the first time since early 2021, amid growing expectations of an imminent policy easing.

The consumer price index CPI rose 1.6 in September from a year earlier, after a rise of 2.0 in August, data from Statistics Korea showed on Wednesday.

It was weaker than a median 1.9 increase tipped in a Reuters poll of economists and marked the weakest annual increase since February 2021.

The reading was below the Bank of Korea39;s BOK mediumterm target of 2 and comes amid growing talk among policymakers and market participants about an imminent interest rate cut with the next policy meeting scheduled for Oct. 11.

South Korea39;s policysensitive threeyear treasury bond yield fell on Wednesday by 3.4 basis points to 2.777, the lowest level since April 2022.

Finance Minister Choi Sangmok and BOK Deputy Governor Kim Woong both said the price stabilisation trend was continuing.

The data once again backed the case for rate cuts, said Ahn Jaekyun, a fixedincome analyst at Shinhan Securities, who expects the BOK to lower interest rates next week.

There is a precedence of the BOK lowering interest rates after seeing inflation coming down to the 1 range from 2, but what is different this…