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South Korea’s Inflation in March is the Highest in More than 10 Years

South Korea’s National Bureau of Statistics said today that the consumer price index (CPI) for March 2022 rose more than 3% for the sixth consecutive month since October last year.

The CPI rose 4.1% in March from a year earlier to 106.06, the fastest growth rate since December in more than 10 years.

Prices for manufactured goods increased by 31.2% y-o-y in March due to the increase in crude oil prices on the world market. Prices for private sector services increased by 4.4% in March, prices for government services increased by 0.6%, and prices for agriculture, livestock, and fisheries increased by 0.4% year-on-year in March.

The core CPI, which excludes volatile energy and food prices, rose 3.3%t y-o-y. This is the strongest increase since December 2011.

South Korea’s central bank said today that foreign exchange reserves declined in March as the value of non-USD asset conversion fell.

South Korea’s foreign exchange reserves stood at $457.81 billion at the end of March, down $3.96 billion from February.

Underlying the decline in foreign exchange reserves is a fall in the value of assets not converted into USD. The dollar index, which measures the development of the dollar against six major currencies in a basket of currencies, rose by 1.2% in March.

South Korea’s forex reserves consist of securities worth $412.1 billion, deposits worth $228.1 billion, special drawing rights (SDRs) worth $154.2 billion, contributions to the International Monetary Fund (IMF) worth $4.58 billion, and gold bullion worth $4.79 billion.

South Korea had the eighth largest foreign exchange reserves in the world at the end of February, unchanged from January.

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