Stronger won drives third straight monthly drop in South Korea's import prices
South Korea's import price index fell for the third month in August, helped by a 6.1% gain in the won against the dollar.
The Bank of Korea released preliminary figures indicating that South Korea's import price index decreased by 2.4% in August, marking the third consecutive monthly decline after reductions of 1.0% in July and 4.2% in June. The on-month fall was largely attributed to a 6.1% appreciation of the Korean won against the U.S. dollar, which helped counterbalance a 15.6% surge in Dubai crude prices, the nation's oil benchmark. While the price of raw materials rose by 1.5% compared with the prior month, intermediate goods prices dropped 4% in the same timeframe.
The central bank emphasized that import price movements are a key driver of inflation, affecting costs throughout the supply chain. Additionally, the export price index slipped 3.7% month-over-month, the steepest decline since December 2022, when a strong currency similarly depressed export prices.
Why it matters
Import price trends affect inflation and consumer costs, influencing monetary policy and household purchasing power.
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