SEOUL: South Korea’s terms of trade continued to rise in July as import prices declined more sharply compared with export prices, data showed Monday.
The country’s net terms-of-trade index for goods climbed 11.9 percent on-year to 99.83 in July, slightly slowing from a 12 percent increase in June but still rising for the 11th straight month, according to the preliminary data by the Bank of Korea (BOK).
The index gauges the quantity of imports that can be purchased through the sale of a single unit of exports. The base year, set in 2013, is 2010, with a benchmark of 100.
Import prices, including crude costs, plunged 20.9 percent in July compared with an 11.4 percent fall in export prices, the central bank explained.
A drop in oil prices usually improves South Korea’s terms of trade as the country relies almost entirely on imports for its oil needs. International oil prices have remained slack since late June amid escalating worries about the health of the Chinese economy.
The monthly income terms-of-trade index, which measures how much can be imported with the total export value, gained 15.9 percent on-year, slowing from a 21.1 percent gain in the previous month, according to the data.
