S. Korea's May import prices dip most in nearly a decade

By Kim Soo-yeon
SEOUL, June 15 (Yonhap) -- South Korea's import prices declined by the largest
margin in nearly 10 years in May due to pullbacks in oil prices and slumping
demand, the central bank said Monday.

Import prices in local currency terms tumbled 13.9 percent last month from a year
earlier, compared with a 1.8 percent fall the previous month, according to the
Bank of Korea (BOK). The May figure marked the steepest fall since June 1999 when
such prices plunged 14.3 percent.
Compared with the previous month, import prices shed 3 percent in May after
falling 7.8 percent on-month in April, it added.
"Although the Korean currency weakened against the dollar from a year earlier,
the global economic slump and a sharp on-year decline in oil prices pulled down
import prices," said Lim Su-young, an official at the BOK.
Raw material prices nose-dived 32.4 percent on-year in May, after shedding 21.8
percent on-year in April, it added.
Although oil prices have recently been on an upward trend, rising above US$70 per
barrel, they remain sharply lower than a year earlier. Oil prices peaked at $147
per barrel in July last year. South Korea, the world's fifth-largest crude buyer,
relies entirely on imports for its oil needs.
The Korean won declined an average 17.6 percent against the U.S. dollar in May,
compared with a year earlier.
Meanwhile, the country's export prices declined 4.1 percent from a year earlier,
marking the first decline in 19 months and logging the steepest fall since
February 2007.
On Thursday, the BOK froze its key interest rate at a record low of 2 percent for
the fourth straight month, saying that a freefall in the local economy has
halted. It made six consecutive rate cuts totaling 3.25 percentage points between
October and February.
sooyeon@yna.co.kr
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