South Korea's consumer inflation slowed more than anticipated in July, dropping below 3%, providing some relief to policymakers after a previous month saw price growth accelerate to its highest level since late 2023.

The country's statistics office reported on Tuesday that the July Consumer Price Index (CPI) rose 2.8% year-on-year, marking the slowest pace since April, down from June's 3.2% increase. The median estimate from economists surveyed by media was 3%.

Core inflation, which excludes volatile food and energy prices, edged up slightly to 2.6%, indicating that underlying price pressures broadly remained steady despite the overall cooling in inflation.

While the latest data may ease concerns about a renewed acceleration in inflation, the figures remain well above the Bank of Korea's target, making it unlikely to alter its policy outlook. Officials have consistently indicated that maintaining a tightening bias is necessary given persistent consumer prices, strong economic growth, and elevated housing costs.

The South Korean won remained largely stable following the data release. The dollar fell 0.1% against the won to 1,431.30.