South Korean Import Prices Slide for Second Straight Month

South Korea's import prices fell for the second consecutive month in July due to a combination of factors, including a stronger Korean won and lower oil prices. According to preliminary data from the Bank of Korea (BOK), the import price index declined by 1% on-month after a 4.2% drop in June.

The BOK attributed the on-month decline to the Korean won's appreciation against the US dollar, which rose by 2% over the one-month period. Additionally, the price of Dubai crude, South Korea's benchmark oil price, decreased by 3.4%. Prices of raw materials rose by 0.8%, while intermediate goods dropped by 2.2%.

The Bank of Korea noted that import prices are a key driver of inflation, as they affect production costs and consumer prices throughout the supply chain. The BOK data also showed that the July export price index increased by 1% from the previous month due to higher electronic prices despite the strong currency.