Korea's import prices rebound in August

Korea's import prices rebounded in August as oil costs gained and the local currency depreciated to the dollar from a year earlier, the central bank said Friday.

In local currency terms, the country's import prices rose 0.3 percent in August from a year earlier, a turnaround from a 1 percent on-year contraction in July, according to the Bank of Korea (BOK).

The import prices, a gauge of future consumer inflation, rebounded last month after falling for the second straight month in July.

The on-month gain in grain and oil prices also pushed up the import prices, it added. The import prices rose 1.7 percent in August compared with July when they shed 0.8 percent.

Last month, prices of Dubai crude, Korea's benchmark, rose 3.4 percent from a year earlier. South Korea, the world's fifth-largest crude buyer, relies entirely on imports for its oil needs.

The Korean currency fell 5.1 percent against the greenback compared with the same period last year. A weaker won makes the won-conversion value of import prices more expensive, putting upward pressure on inflation.

The data came one day after the BOK froze the key interest rate at 3 percent for the second straight month, opting to save ammunitions to brace for any worsening of economic conditions at home and abroad.

Meanwhile, the country's export prices in Korean won grew 1.1 percent in August from the previous year, slowing from a 2.2 percent gain in July.

They inched up 0.2 percent on-month in August, a turnaround from a 1.3 percent fall in the previous month, mainly because oil prices gained on-month, the central bank said. (Yonhap)