SEOUL : South Korea’s import prices accelerated in December at the fastest pace in five months, central bank data showed on Wednesday, signalling renewed inflationary pressures due to a weakened local currency.
The import price index, in terms of local currency, rose 7.0 per cent in December from a year earlier, the fastest since last July, according to the Bank of Korea.
It was the second consecutive month of gains in import prices, which affect consumer prices with a time lag, after a rise of 2.8 per cent in November.
The won ended December down 5.2 per cent against the dollar, marking its largest monthly decline in 22 months, after reaching its weakest level since March 2009 due to domestic political turmoil.
Last month, South Korea’s consumer inflation quickened to 1.9 per cent, exceeding market expectations and near the BoK’s 2 per cent target, with the central bank flagging a possibility of inflation accelerating further this month.
The BoK is expected to lower interest rates by a quarter percentage point to 2.75 per cent on Thursday, a month earlier than previously anticipated, to support a struggling economy amid risks from political uncertainty.
The export price index rose 10.7 per cent last month, also the fastest in five months, after climbing 7.0 per cent in November.
