South Korea’s annual inflation rate probably fell in October for the third straight month, giving the central bank room to add to an unprecedented series of rate cuts to shield the economy from global recession, a Reuters poll shows.

The median forecast of 11 economists was for consumer prices in October to have risen 4.9 percent from a year earlier, easing from annual growth of 5.1 percent in September, largely due to cheaper oil and food.

It would mark the lowest pace of consumer inflation since May, when the rate was 4.9 percent. Still, it would keep inflation above the central bank’s target range of between 2.5 percent and 3.5 percent, where it has been since December.

“October data will likely confirm that inflation has already passed a peak and would ease over time, leaving the central bank with more room for more rate cuts,” said Lee Sang-jae, an economist at Hyundai Securities.

Inflation hit a 10-year high in July of 5.9 percent but core inflation, which excludes food and fuel prices, hit a decade high in September at 5.1 percent.

Citigroup expects core inflation to have accelerated slightly in October to 5.2 percent.

The Bank of Korea slashed its benchmark interest rate [KROCRT=ECI] by a record 75-basis points on Monday in an emergency action to stave off the threat of a global recession on Asia’s fourth-largest economy.

The move followed a 25-basis-point cut at a scheduled monthly meeting earlier in October, delivering an unprecedented 100-basis-point rate cut in a single month.

The won has recovered much of its recent heavy losses, another factor that will make it easier for policy makers to consider another rate cut.

The won firmed after the Federal Reserve agreed to provide a $30 billion swap line to the Bank of Korea.

The central bank next reviews policy on Nov.7.

Forecasts for South Korea’s September consumer price index:

Percent change from

prev month year earlier

DBS 0.1 5.0

Citigroup -0.1 4.8

HSBC ~ 4.8

SC First Bank 0.4 5.4

SK Securities 0.4 5.3

NH Investment & Securities 0.0 4.9

Solomon Investment & Securities -0.1 4.8

Taurus Investment & Securities -0.1 4.8

Woori Investment & Securities ~ 4.9

Hana Daetoo Securities -0.3 4.6

Hyundai Securities -0.1 4.9

______________________________________________________

Median -0.1 4.9

Low -0.3 4.6

High 0.4 5.4

Source: http://www.afxnews.com

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