Import prices in South Korea declined for a third consecutive month in August, as a firmer local currency helped counterbalance rising oil costs triggered by ongoing tensions in the Middle East.

According to preliminary data released Tuesday by the Bank of Korea (BOK), the import price index fell 2.4% month-on-month in August, following a revised 1.0% drop in July and a 4.2% contraction in June.

The central bank attributed the monthly decline to a 6.1% appreciation of the Korean won against the U.S. dollar during the period, which partially offset a 15.6% month-on-month surge in the price of Dubai crude, South Korea's benchmark oil grade.

Digging deeper into the figures, raw material prices edged up 1.5% in August, while intermediate goods prices fell 4% over the same period, the BOK data showed.

The BOK noted that import prices serve as a key driver of inflation, as changes ripple through the entire supply chain, influencing both production costs and consumer price levels.

Separately, the export price index dropped 3.7% month-on-month in August, marking the steepest fall since December 2022, when it slid 6.1% amid a stronger won.