[News Today] CONSUMER INFLATION DOWN TO 2%

[LEAD]
Consumer price inflation for August hit 2%, the lowest in over three years, meeting the Bank of Korea's price stability target. Despite this, the heat has kept some of the fruit and veggie prices high.

[REPORT]
Three heads of cabbage cost 33,000 won, nearly 25 U.S. dollars.

The price is about 10,000 won or more than seven dollars higher than the same time last year.

A summer squash sells for 2,000 won, about a dollar fifty, at a traditional market.

Jin Yeong-dae/ Seoul resident
The price of squashes spiked. I used to buy several items with 10,000 won (USD 7.5), but now I can buy very few with the same money.

Statistics show that the prices of napa cabbages, green chili peppers, and summer squashes rose roughly 10% on-year.

The higher prices are blamed on this year's long summer heat waves and heavy rain.

The prices of pears and apples also rose.

However, the price of overall agricultural products didn't increase as much as the previous month and a supply of newly harvested fruits helped stabilize the prices of items that had fluctuated until August.

Jo Hyeon-suk/ Fruit Store Owner
A single pear used to cost as much as 15,000 won (USD 11) until newly harvested pears came out. Now a pear costs 5,000 won (USD 3.7).

Petroleum prices also rose only 0.1%, thanks to declining international oil prices and the base effect of being compared to last year when oil prices had spiked.

The consumer price inflation rate for August recorded 2%, the lowest in three years and five months, to reach the Bank of Korea's stable price target.

Prof. Kim Jung-sik/ Yonsei University
Housing prices and ballooning household debts are a problem, but the interest rate could be lowered once those issues are stabilized.

Bank of Korea Governor Rhee Chang-yong said that the time has come to consider lowering the base interest rate to stabilize prices.

He added that the central bank will examine financial stability before determining the right time for rate adjustment.