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South Korea Jan import prices fall at fastest rate since early 1999
[SEOUL] Cheap global oil prices dragged down South Korea's import prices in January at the fastest pace since early 1999, central bank data showed on Wednesday, keeping price pressures negligible.
Import prices in won terms fell 19.2 per cent in January from a year ago, the Bank of Korea said, which was the steepest decline since spiralling down 24.6 per cent in March 1999 and followed a 13.0 per cent drop in December.
The drop in prices was led by falling global oil prices, which fell 56 per cent in January in annual terms, the central bank said. Oil-related products make up 30 per cent of all imported goods.
Mirroring the fall in oil prices, the prices for oil products fell 47.7 per cent in January on-year.
A Bank of Korea official said the trend could be turned around if recent rallies in oil prices keep up, although he declined to forecast future commodity prices.
The central bank has said low annual inflation in South Korea, which averaged 1.3 per cent last year, has been due to supply-side factors and it remains adamant that consumer demand is on a weak but steady rebound.
Export prices, also in won terms, slipped an annual 8.5 per cent in January versus a revised 4.4 per cent fall in December and marked the fastest drop in four months.
The drop in export prices was also attributed to low global oil prices, according to the central bank.