Seoul: The recent weakness of the South Korean won is expected to put more inflationary pressure on the country’s economy, driving up consumer prices, a central bank report says.
The Bank of Korea (BoK) assessed the sharp fall in the local currency likely pushed up the consumer price index for last month by 0.05 to 0.1 percentage point, according to its report submitted to representative Lim Kwang-hyun of the main opposition Democratic Party.
In December, consumer prices grew 1.9% from the same month last year, accelerating from the 1.5% year-on-year growth recorded in November.
The BoK anticipated consumer prices could go up further this month as the weakness of the South Korean won will continue to put inflationary pressure on the economy, but will hover below the 2% level considering the low pressure from demand and the base effect in oil and agriculture prices.
The value of South Korea’s currency against the US dollar fell 5.3% in December from a month earlier amid continuing worries about economic growth in the country, coupled with the persisting political chaos sparked by now-impeached President Yoon Suk Yeol’s botched declaration of martial law on Dec 3.
It marked the second-biggest drop among currencies of 20 major economies, after the Russian ruble’s 6.4% fall, according to the report.
The won traded at 1,472.5 won per US dollar as of end-December, compared with 1,394.7 won a month ago. — The Korea Herald/ANN
