Gov't eyes hike in 2010-2012 inflation target

SEOUL, Nov. 24 (Yonhap) -- The government plans to adjust its medium-term
consumer inflation target to allow for more flexibility in monetary policy,
government and financial sources said Tuesday.
The sources said the government, in consultation with the central bank, has come
up with a plan to set the country's inflation target for 2010-2012 at 3 percent,
with a plus or minus range of 1.0 percentage point, compared with 3 percent with
a plus or minus range of 0.5 percentage point in the 2007-2009 period.
The range expansion can give policymakers greater leeway in implementing monetary
policies in the future to cope with growing economic uncertainties, according to
the sources.
The wider margin also reflects concerns related to possible hikes in the prices
of raw materials and energy resources, and large amounts of liquidity in the
global market resulting from government implementation of expansionist policy
measures to fuel business investment, production and consumer spending.
An official at the Bank of Korea said the central bank's policy-setting Monetary
Policy Committee is scheduled to make a decision on Friday on consumer price
target setting.
Kwon Soon-woo, a research fellow at the Samsung Economic Research Institute, said
there have been steady calls to broaden the country's inflation control target to
2.0-4.0 percent from the 2.5-3.5 percent leeway given at present.
yonngong@yna.co.kr
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