South Korea's terms of trade dropped at the fastest clip in nearly seven years last month as import prices rose sharply amid higher crude oil prices, central bank data showed Friday.
The terms of trade index for products came to 92.94 last month, down 9.7 percent from a year earlier, according to preliminary data from the Bank of Korea (BOK).
It marked the largest on-year decline since December 2011, when the index plunged 9.9 percent. Also, the July index hit the lowest level after 92.4 tallied in November 2014, staying below the 100 line for eight months in a row.
The index measures the amount of imports a country can purchase for each unit of exports and shows how the country's exports are doing in comparison to those of other countries.
The BOK said the sharp drop in the trade terms index is driven by rising oil prices as South Korea imports almost all of its crude oil.
Prices of Dubai crude, South Korea's benchmark, soared 58.4 percent on-year to US$73.61 in the previous month.
As a result, import prices jumped 15.3 percent from a year earlier last month, outpacing a 4.1 percent gain in export prices.
Meanwhile, the income terms of trade, which gauge the total amount of goods that a country can buy for its total exports, climbed 1.6 percent on-year to 145.79 last month, thanks to a rise in South Korea's total exports. (yonhap)