South Korea’s import prices rose at the fastest pace in six months in October primarily because the local currency depreciated against the U.S. dollar, the central bank said Tuesday.
In local currency terms, the country’s import prices rose 16 percent in October from a year earlier, quickening from the 14 percent on-year gain in September, according to the Bank of Korea.
The October data marked the fastest expansion since a 19 percent on-year advance in April, the BOK added.
Compared with the previous month, however, the growth of import prices slowed to 0.9 percent in October from 3.7 percent the previous month as commodity prices declined amid the global economic slowdown.
“The on-year gain in oil prices slowed in October compared with September. But the import prices grew at a faster pace last month due to the won’s weakness to the dollar,” said Lim Su-young, an official at the BOK.
Prices of Dubai crude, South Korea’s benchmark, grew 29 percent on-year in October, slowing from a 40 percent surge tallied in the previous month.
The Korean won fell 2.77 percent to the dollar in October, compared with the same period of last year. A weaker won makes imports more expensive and puts upward pressure on inflation.
Meanwhile, the country’s export prices in Korean won advanced 9.2 percent in October from the previous year, accelerating from a 5.8 percent on-year gain in September, according to the central bank. It marked the sharpest gain since the 17.4 percent tallied in March 2009.
Compared with the previous month, export prices rose 1.4 percent in October, slowing from a 3.4 percent on-month gain in September.
The data came as the BOK froze the key interest rate at 3.25 percent for the fifth straight month on Friday due to the deepening eurozone debt crisis.