The exchange rates of the Korean won against other currencies are seen on a billboard of a money exchange in central Seoul on Jan. 1. The recent weakness of the Korean won is expected to put more inflationary pressure on South Korea’s economy, driving up consumer prices, a central bank report showed Sunday.
The Bank of Korea 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 Rep. Lim Kwang-hyun of the main opposition Democratic Party.
In December, consumer prices grew 1.9 percent from the same month last year, accelerating from the 1.5 percent on-year growth recorded in November.
The BOK anticipated consumer prices could further go up this month as the weakness of the Korean won will continue to put inflationary pressure on the economy, but will hover below the 2 percent 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 percent in December from a month earlier amid growth woes, coupled with the persisting political chaos sparked by now-impeached President Yoon Suk Yeol’s botched martial law declaration.
It marked the second-biggest drop among currencies of 20 major economies, after the Russian ruble’s 6.4 percent fall, according to the report.
The Korean won traded at 1,472.5 won per dollar as of end-December, compared with 1,394.7 won a month ago. (Yonhap)