S. Korea's September import prices up 2.3 pct on weaker won

SEOUL, Oct. 14 (Yonhap) -- South Korea's import prices rose in September from a month earlier as a weaker local currency overshadowed falling oil prices, the central bank said Tuesday.

Import prices in local currency terms gained 2.3 percent on-month in September,
compared with a 4.4 percent monthly fall the previous month, according to the
Bank of Korea (BOK). In August, the country's import prices declined for the
first time since June 2007 when they dropped 0.3 percent on-month.
Meanwhile, they jumped 42.6 percent on-year in September after rising the same
42.6 percent annually in August, it added.
"Raw material costs declined as a result of falling oil prices, but import prices
gained on a softer won," the BOK said.
Raw material prices fell 2.8 percent on-month in September on the back of
retreats in oil prices.
Crude oil prices have been on the downward path after peaking at almost $150 per
barrel in July. South Korea, the world's fifth-largest crude buyer, relies
entirely on imports for its oil needs.
A weaker won against the dollar is putting upward pressure on inflation as it
makes imports more expensive. The South Korean currency has declined more than 22
percent so far this year.
Last week, the BOK cut its key interest rates to 5 percent from 5.25 percent in a
concerted effort to soothe global financial turmoil and stem the drastic slowdown
of the local economy. It was the first rate cut since November 2004.
BOK Gov. Lee Seong-tae said if the foreign exchange market stabilizes and the
downward trend of oil prices continues, the growth of inflation is expected to
ease toward next year.
sooyeon@yna.co.kr