South Korea's producer prices declined for the 11th straight month in August due to on-year retreats in oil costs and the local currency's gain against the U.S. dollar, the central bank said Tuesday.

The producer price index, a barometer of future consumer inflation, slid 1.3 percent in August from a year earlier, compared with a 1 percent on-year decline in July, according to the Bank of Korea (BOK).

On an annual basis, the producer prices have fallen every month since October 2012 when such prices fell 0.5 percent on-year. In April, the index fell 2.8 percent from a year earlier, the fastest on-year decline in 42 months.

Prices of Dubai crude, South Korea's benchmark, fell 1.4 percent in August from a year earlier, compared with a 4.5 percent on-year gain in July. The local currency gained 1.32 percent to the greenback in August from the previous year.

Compared with a month earlier, the producer prices inched up 0.3 percent, after staying flat in the previous month.

The data came as the BOK froze the key interest rate at 2.5 percent for the fourth straight month in September amid growing speculation that the Federal Reserve might decide to taper its bond-buying stimulus program from this month.

Korea's consumer prices remained in the 1-percent range for the 10th straight month in August. The on-year growth in consumer inflation in August was running below the BOK's inflation target band of 2.5-3.5 percent for 2013-2015 (Yonhap News)