Seoul, April 29 (IANS) The recent depreciation of the South Korean won against the US dollar may add short-term pressure on inflation, but its overall impact is likely to be less significant than that of domestic factors, a state-run think tank said on Tuesday.
The won-greenback exchange rate has remained above the 1,400-won level — a threshold not seen since 2009 — following the shocking, albeit brief, martial law imposition by ousted former President Yoon Suk Yeol in December. The rate has faced further pressure following new tariff measures implemented by the Donald Trump administration.
“The impact of a strong U.S. dollar on import prices tends to diminish over time, while domestic factors behind the won’s depreciation generally have a more lasting and pronounced effect on consumer prices,” the Korea Development Institute (KDI) said in its latest report, reports Yonhap news agency.
In March, the country’s consumer prices, a key indicator of inflation, rose 2.1 percent on-year, remaining in the 2 percent range for the third consecutive month.
The report also found that recent fluctuations in the exchange rate were mainly driven by dollar strength, forecasting that unless the won-dollar exchange rate surges sharply, the consumer price is unlikely to exceed the Bank of Korea (BOK)’s 2 percent target by a significant margin.
Meanwhile, South Korean retailers saw their sales gain more than 9 percent from a year earlier in March on robust online demand for food and daily necessities, data showed on Tuesday.
Last month, the combined revenue of major retail companies rose 9.2 percent from a year ago, according to data compiled by the Ministry of Trade, Industry and Energy.
The ministry said the increase is mainly attributable to strong demand for e-commerce deliveries in food and daily shopping sectors and other services.
Sales from the online sector increased 19 percent on-year as revenue from the food sector rose 19.4 percent and revenue from the daily necessities sector expanded 7.5 percent.
Sales from online services, such as food delivery and e-coupons, spiked 78.3 percent. On the other hand, offline platforms saw their revenue decrease 0.2 percent on-year in March, affected by weak consumer sentiment.
In particular, supermarket sales went down 0.2 percent, and sales from department stores dropped 2.1 percent.
—IANS
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