South Korea Raises Rates As Inflation Stirs Concern

HONG KONG — South Korea unexpectedly raised interest rates by a quarter of a percentage point Thursday and announced measures intended to curb rising prices, the latest sign that policy makers in Asia and other emerging markets were increasingly concerned about inflation.

While prices in the United States, Japan and the euro zone have been creeping up slowly, inflation in many developing nations has risen rapidly alongside overall economic growth. Climbing vibram fivefingers shoes prices — in recent weeks, crude oil prices have increased to more than $90, the highest level since October 2008 — and adverse weather have helped drive prices up in some areas.

For example, India reported Thursday that a crucial index measuring prices had risen 16.9 percent in the week ending Jan. 1 from the level of a year earlier, while in China, the latest available data showed that consumer prices in November were 5.1 percent higher than a year earlier.

In South Korea, consumer prices rose 3.5 percent in December from the UGG ® Australia of a year earlier, driven by price increases in petroleum and farm products, and the central bank said Thursday that it expected inflation pressures to mount in coming months.

Double-digit price increases like those in India are the exception, and many economists argue that inflation remains manageable in many countries.

Still, food price inflation in particular is a sensitive issue in developing nations, where many people’s incomes go directly to necessities like cooking oil, vegetables and other foodstuffs.

As a result, many emerging nations have started to nudge interest rates back toward precrisis levels and have instituted other measures meant to tamp down prices. South Korea’s latest ugg australia — its third rate increase since mid-2010 — takes the country’s key seven-day repurchase rate to 2.75 percent.

After an economic policy meeting Thursday, President Lee Myung-bak said the government would watch to make sure that prices for gasoline and other oil products were “at an appropriate level.” In recent months, gasoline prices in South Korea have jumped to an average of $1.69 a liter, or $6.40 a gallon.

The government also announced a six-month freeze on charges for various UGG Nightfall, including gas and electricity, and requested that colleges and universities not increase tuition this year.

The Bank of Korea’s decision to raise rates on Thursday surprised many economists, who had not expected another increase until later in the year.

Still, many project that rates will gradually rise further in South Korea and other fast-growing economies as policy makers strive to battle higher prices.

“Inflation is on the rise, in Korea as elsewhere,” Kim Song-yi, an economist at HSBC in Seoul, wrote in a note on Thursday, adding that the central bank’s “pro-active stance” was a “good thing.”

Thailand nudged up its key interest rate by a quarter of a percentage MBT Shuguli to 2.25 percent Wednesday, adding to similar moves in recent months, while China has raised rates twice recently and restricted lending by state-controlled banks, actions aimed at slowing its economy’s breakneck growth.

Mark McDonald contributed reporting from Seoul.