S. Korea's import price growth hits 7-month low

South Korea's import prices grew at the slowest clip in seven months in June as the local currency's ascent to the dollar overshadowed an on-year gain in oil prices, the central bank said Friday. In local currency terms, the country's import prices rose 10.5 percent in June from a year earlier, slowing from a 13.2 percent on-year expansion tallied in May, according to the Bank of Korea (BOK). The June reading marked the slowest growth since an 8.2 percent expansion in November 2010, it added. Compared with the previous month, import prices inched down 0.4 percent, compared with a 2.3 percent on-month fall in May. "The on-year growth of import prices slowed as the local currency rose to the greenback even though oil prices gained from a year ago," said Lim Su-young, an official at the BOK. "A fall in chip prices drove down prices of computers and telecommunication goods and prices of petrochemical products grew at a slower pace." The eased growth of import prices gave weight to the BOK's decision to freeze the key interest rate at 3.25 percent on Thursday. The Korean won appreciated more than 12 percent to the greenback in June compared with the previous year. A stronger won helps ease inflationary pressure as it makes prices of imported goods cheaper. Meanwhile, the country's export prices in Korean won fell 0.4 percent in June from the previous year, a turnaround from a 3.3 percent on-year gain in May, due mainly to the won's gain, the BOK noted. Export prices declined for the first time in nine months in June.