South Korea's central bank also increased the projection of inflation to its target limit after claiming the country's economy will only expand by 4.3 per cent - lower than the 4.5 per cent estimated in April, Bloomberg reports.
It is anticipated that consumer prices, however, will reach four per cent, a level greater than the 3.9 per cent gain first anticipated.
Kong Dong Rak, an analyst at Taurus Investment and Securities, said: "If risks to growth loom larger, the central bank may pause again next month. They may wait until the dust over Europe and the US is settled a bit more."
The Bank of Korea - which was established in 1950 - explained that escalated food costs, higher expectations and increasing demand due to economic growth are all reasons for the rises in prices.
By Tony Aynsley