Seoul: Import prices in South Korea increased for the first time in six months in July, primarily influenced by climbing global oil prices and a depreciation of the Korean won, as revealed by central bank data on Thursday.
According to Yonhap News Agency, the Bank of Korea (BOK) reported that the import price index rose by 0.9 percent from the previous month, marking a rebound after a consistent decline over the past five months. This upturn was attributed to the average price of Dubai crude, which serves as South Korea's benchmark, increasing by 2.3 percent to an average of US$70.87 per barrel in July.
Additionally, the depreciation of the local currency played a role, with the Korean won falling 0.6 percent against the U.S. dollar to an average of 1,375.22 won per dollar in the same month, further contributing to the rise in import prices, according to the BOK.
Import prices significantly influence inflation, affecting both production costs and consumer prices throughout the supply chain. Lee Moon-hee, a BOK official, highlighted the ongoing uncertainties in global oil prices and exchange rates, emphasizing the need for careful monitoring as these factors continue to diverge.
In tandem with import prices, the export price index also experienced an increase, rising by 1 percent in July, the first gain in four months. Meanwhile, consumer prices, a crucial measure of inflation, grew by 2.1 percent on a year-on-year basis in July, sustaining growth above the 2 percent threshold for the second consecutive month.