Inflation in South Korea has slowed to the target range, but concerns about exchange rate volatility remain.

South Korea's consumer inflation rate has slowed to a level consistent with the central bank's target, as falling fuel costs and a high base effect from the same period last year helped to suppress price hikes. South Korea's Statistics Department said on Tuesday that the consumer price index rose 2% in January compared to the same period last year, which is a deceleration from the 2.3% increase in December. This result is in line with the expectations of economists surveyed. The core inflation rate, which excludes volatile food and energy prices, also rose by 2%, unchanged from the previous month. Both of these price indicators are currently at the Bank of Korea's target level of 2%. The slowdown in inflation is in line with recent signals from the Bank of Korea. Last month, the central bank kept its benchmark interest rate unchanged at 2.5% and dropped any mention of possible further easing measures, further reinforcing market expectations that the authorities have now shifted to a more or less neutral stance for the time being.