Seoul, April 29 || 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 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.