Nudged by global oil prices and a softer currency, South Korea's producer price index (PPI) modestly accelerated in December.

South Korea's PPI rose 1.7% on year in December 2024, and gained 0.3% from November 2024, reported the Bank of Korea (BoK) on Tuesday.

In November, the PPI had risen 1.4% on year, and 0.1% from the previous month, added the BoK.

South Korean coal and petroleum product producer prices, after declining 5% on year in November, swung to a 0.6% on-year gain in December, reflecting higher global fossil-fuel bills, reported officials.

Chemical products, many of which are petroleum-based, rose 0.9% on year in December, a reverse from a 0.2% decline in November, added the BoK.

The South Korea PPI measures prices of goods and services sold by domestic manufacturers and producers at the wholesale level, that is prices between businesses. The PPI is distinct from the consumer price index (CPI) that measures prices at retail charged to shoppers.

The PPI is considered one indicator of the future trajectory of retail prices, as shopkeepers try to recoup costs or pass along savings to consumers.

Another South Korean price index, the domestic supply price index, rose 2.6% on year in December and by 0.6% from November, added the BoK.

Boosting prices in South Korea, a manufacturing nation that imports much in the way of raw materials, is a softer national currency.

The South Korean won traded for 1,308 to the US dollar in late September of 2024, but has generally softened since, and traded for 1,457 to the greenback on Tuesday, an 11.4% decline.

The decline of the won's exchange rate raises the price of imported goods, measured in won.

Last week, at the policy meeting of the BoK, the central elected to hold key interest rates steady, in part citing the soft exchange rate of the won.