South Korea’s import prices grew at the slowest clip in eight months in July as the local currency’s ascent to the dollar outweighed an on-year gain in oil prices, the central bank said Friday.
In local currency terms, the country’s import prices rose 9.8 percent in July from a year earlier, slowing from a 10.5 percent on-year expansion tallied in June, according to the Bank of Korea (BOK).
The July reading marked the slowest growth since an 8.2 percent expansion in November 2010, it added.
Compared with the previous month, import prices declined 1.1 percent, compared with a 0.4 percent on-month fall in June.
“Even though oil prices jumped 51 percent in July from the previous year, the growth pace of import prices slowed due to the won’s appreciation to the dollar,” said Lim Su-young, an official at the BOK.
Lim said it remains to be seen whether the trend of slowing import prices would continue for August due to volatile oil prices and the impacts of the won’s recent depreciation. The Korean won lost value relative to the dollar this month due to the grim global economic outlook.
The eased growth of import prices gave weight to the BOK’s decision to freeze the key interest rate at 3.25 percent for the second consecutive month on Thursday.
The Korean won climbed almost 14 percent to the greenback in July from the previous year, larger than the about 12 percent on-year advance seen in June, the BOK said. A stronger won helps ease inflationary pressure as it makes prices of imported goods cheaper.
Meanwhile, the country’s export prices in Korean won fell 1.3 percent in July from the previous year, compared with a 0.4 percent on-year fall in June, due mainly to the won’s gain, the BOK said.