The producer price index dipped 0.3% in July from a year ago, the Bank of Korea data showed, following a 0.1% gain in June.

The PPI in July marked its first fall since October 2016, the fastest annual decline since a 1.1% drop in September 2016.

The Bank of Korea cut the policy interest rate in July for the first time since June 2016, and investors priced in another cut over the coming months as the economy is faced with growing risks from the cooling global demand and weak domestic spending.