Strong won sinks prices of imports

Korea’s import prices in September fell at the fastest pace since last May on an annual basis as the won rose and crude oil prices fell, the central bank said yesterday.

Import prices in won terms in September fell 8.1 percent compared to a year ago, according to the Bank of Korea.

This drop compared to a 5.3 percent fall in August and was the quickest fall since a 9.6 percent drop seen in May.

A central bank official said the appreciation of the won was the biggest reason for the decline, adding the local currency had strengthened 3.3 percent in September against the dollar from the same period last year.

Crude oil prices also fell 2.9 percent in September from a year earlier.
Import prices have kept to an easing track since a 0.5 percent rise in August last year, keeping inflation low.

The data was released after the Bank of Korea lowered its forecast for inflation to an annual 1.2 percent, compared to its previous 1.7 percent forecast.

Export prices fell by 4.6 percent in September year-on-year, also the biggest drop since a 5.8 percent decline in May this year.Reuters