SEOUL: South Korea’s import prices decreased for the second consecutive month in September, influenced by declining global oil prices and a strengthening Korean won, as per the latest central bank data.
According to Yonhap News Agency, the Bank of Korea (BOK) released preliminary data on Tuesday indicating that the import price index fell by 2.2 percent in September from the previous month, following a 3.5 percent decline in August. Year-over-year, import prices also saw a reduction, dropping by 3.3 percent after a 1.8 percent increase the month before.
The decrease in import prices is significant as it plays a crucial role in determining the overall inflation trajectory in the country. The central bank highlighted that the price for Dubai crude oil, which serves as a benchmark for South Korea, was recorded at US$73.52 per barrel in September, a decrease from $77.6 in August. Additionally, the Korean won strengthened against the dollar, with an average exchange rate of 1,334.82 last month, compared to 1,354
.15 in the preceding month.
In terms of specific categories, the prices of raw materials dipped by 3.4 percent month-on-month in September, and intermediate goods prices fell by 2.1 percent during the same period.
The data also showed a decline in the export price index, which fell by 2.3 percent in September after a 2.8 percent decrease in August. As import prices impact consumer prices, it is noteworthy that South Korea’s consumer inflation slowed to the lowest rate in three and a half years in September, with the consumer price index rising only 1.6 percent year-on-year, down from a 2 percent increase in August. This marks the lowest inflation rate since February 2021, when it was recorded at 1.4 percent.
Earlier this month, the BOK responded to the moderated inflation and sluggish domestic demand by cutting its key interest rate by a quarter percentage point to 3.25 percent, marking the first rate reduction in 38 months.