Bloomberg News

South Korea to Drop Gold Rings from CPI Basket, Bahk Says

October 21, 2011

(Updates with Bahk quote in second paragraph.)

Oct. 21 (Bloomberg) -- South Korea will drop gold rings from the basket of goods comprising its consumer-price index in November, trimming the inflation rate, Finance Minister Bahk Jae Wan said.

“Many people aren’t buying gold rings any more as they’re expensive,” Bahk told lawmakers in parliament in Seoul today. “Taking out gold rings, inflation may be below 4 percent.”

Higher gold prices have skewed inflation figures in Asian nations including India and Indonesia. A 29 percent jump in the cost of gold rings pushed South Korea’s inflation past 5 percent for the first time in three years in August.

South Koreans are buying gold as an investment asset rather than a consumer product, Bang Tae Kyoung, deputy director of the statistics agency, said last month. The nation has a tradition of giving what is called a “Dol” ring as a gift for a child’s first birthday.

Consumer prices rose 4.3 percent last month, still above the central bank’s target ceiling of 4 percent.

--Editors: Ken McCallum, Paul Panckhurst

To contact the reporter on this story: Eunkyung Seo in Seoul at eseo3@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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