South Korea's consumer price index (CPI) remained subdued in February, striking a bull's eye on the nation's central bank inflation target, although some analysts warned underlying pressures could be building.

South Korea's CPI rose 2% on year in February, and gained 0.3% on from January, reported the Ministry of Data and Statistics (MDS) on Friday.

Food and nonalcoholic beverage prices rose 2.1% on year in February, while restaurant and hotel charges lifted 3% in the same time frame.

The Bank of Korea has a 2% annual inflation target on the CPI.

South Korea's CPI-core, which strips out certain food and energy bills, rose 2.3% on year, and rose 0.4% on month, according to MDS.

The slightly higher inflation rates signaled by the CPI-core, in addition to recent jumps in oil prices and a softening national currency, could signal some testing of central bank price targets in the remainder of the year, said ING Think, an arm of the Dutch investment house.

"With oil prices climbing and the KRW (South Korean won) weakening again, the economy faces greater inflation risks than previously forecast," advised ING Think.

Meanwhile, the price category of "private services" rose 3.6% on year in February. The price of services is sometimes seen as one indicator of underlying inflation forces, as productivity gains in services are generally limited.

Taking fuel bills and higher import charges into consideration, the projected overall impact may increase the reported inflation rate in South Korea by 0.2% to 0.4% in the coming months, advised ING Think.

"Our CPI forecast for 2026 has been updated from 2.0% year-over-year to 2.2%, reflecting recent developments in oil prices and the Korean won," said ING Think.

With a mindful eye on inflation, the Bank of Korea is not likely to engage in monetary easing or lower interest rates any time soon.

"We anticipate the Bank of Korea will maintain the current neutral policy stance to support the recovery in domestic demand," said ING Think. "We keep our Bank of Korea view of holding its policy rate at 2.5% throughout 2026."