Seoul: Import prices fell for the second consecutive month in July due to a stronger Korean won and a decrease in oil prices amid the protracted Middle East uncertainties, central bank data showed Friday.
According to Yonhap News Agency, the import price index fell 1 percent on a month-to-month basis following a 4.2 percent drop in June, as per preliminary data from the Bank of Korea (BOK). Despite the monthly decline, the index saw an increase of 18.7 percent compared to the same period last year.
The BOK reported that the month-on-month decline was influenced by the Korean won appreciating against the U.S. dollar by 2 percent over the month, along with a 3.4 percent decrease in the price of Dubai crude, which serves as South Korea's oil price benchmark. While prices of raw materials rose 0.8 percent in July from the previous month, intermediate goods saw a reduction of 2.2 percent over the cited period.
Import prices are a crucial factor in inflation, affecting production costs and consumer prices throughout the supply chain, as highlighted by the central bank. Meanwhile, the BOK data also showed that the export price index rose by 1 percent from the previous month due to higher electronic prices despite the strong currency. On an annual basis, the index surged by 49.1 percent.