South Korea's central bank will raise interest rates further to combat persistent inflation, the outgoing deputy governor said on Tuesday. "Unless there is an extraordinary shock or an extraordinary factor, the possibility of an additional rate hike is high," Bank of Korea Senior Deputy Governor Ryoo Sang-dai said at a press conference as his three-year term ends on August 20.

The central bank raised rates for the first time in three-and-a-half years last month and has signalled more increases to come. Ryoo said the bank is more concerned about demand-driven inflation from the domestic economic recovery than supply shocks, and that export and credit card spending data will shape the policy decision at the August 27 meeting.

Inflation softened to a three-month low in July on falling oil prices, but policymakers remain wary of upward pressures. Markets have not ruled out a back-to-back rate hike this month, Reuters reports.