Seoul’s Import Price Growth Hits 10-Year High

South Korea's import prices grew at their fastest pace in more than 10 years in May owing to soaring oil prices and the won's depreciation, the central bank said Friday.

Import prices jumped 44.6 percent in May from a year earlier, picking up from a 31.3 percent rise the previous month, according to the Bank of Korea (BOK). The May figure marked the steepest increase since March 1998, when prices grew 49 percent.

Month-to-month import prices climbed 10.7 percent in May, compared with a 3.8 percent advance in April.

In particular, raw material prices rose by a record 83.6 percent in May from a year earlier, marking the fastest increase since 1980 when the bank began to compile the data. The price of Dubai crude, South Korea's benchmark, jumped 84.8 percent in May, compared with a year earlier. South Korea, the world's fifth-largest crude buyer, relies almost completely on imports for its oil needs.

The won's fall against the greenback is also putting upward pressure on inflation as it makes imported goods more expensive. The local currency has fallen 9.5 percent against the greenback so far this year.

On Thursday, the BOK froze its key interest rate for the 10th straight month at 5 percent on inflation woes. South Korea's consumer price growth hit a seven-year high of 4.9 percent in May, breaching the BOK's target of 2.5-3.5 percent for the sixth straight month.