Import prices fall in August on lower oil prices, strong won

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Import prices fall in August on lower oil prices, strong won

Published: 13 Sep. 2024, 10:27 Updated: 13 Sep. 2024, 11:24

SHIN HA-NEE
shin.hanee@joongang.co.kr

Containers are stacked at a port in the southeastern city of Busan on July 1. [NEWS1]

Korea's import prices fell last month, marking a downtick after two months of increases, driven mainly by a drop in global oil prices and the appreciation of the local currency against the dollar, central bank data showed Friday.

The import price index declined 3.5 percent in August from a month earlier following a 0.4 percent on-month gain the previous month and a 0.6 percent fall in June, according to preliminary data from the Bank of Korea (BOK).

From a year earlier, import prices also rose 1.8 percent last month following a 9.9 percent on-year advance in July, the data showed.

Import prices are a major factor in determining the path of the country's overall rate of inflation.

The Dubai crude price, Korea's benchmark, stood at $77.60 per barrel in August, down from $83.83 the previous month, according to the central bank.

The won averaged 1,354.15 against the greenback last month, up from 1,383.38 the previous month.

Import prices of raw materials dipped 3.5 percent on-month in August, while those for intermediate goods gained 5.1 percent over the cited period.

The export price index also fell 2.6 percent last month after a 0.8 percent on-month rise the previous month, according to the data.

"Global oil prices have been lower compared to the previous month's average so far in September, and the won-dollar exchange rate has also been declining," said Lee Moon-hee, head of the price statistics team at the BOK, during a press briefing.

"Whether this trend will last remains to be seen due to uncertainties, but if it continues, I cannot find any factors that may push inflation upward at this point,"

Korea’s headline inflation slowed to 2 percent in August, the lowest level in more than three years, as the prices of agricultural and petroleum products stabilized.

The BOK held its key interest rate at 3.5 percent for the 13th straight meeting.

BY SHIN HA-NEE, YONHAP [shin.hanee@joongang.co.kr]