Korea's terms of trade improved from a year earlier last month but mostly due to import prices falling at a faster rate than export prices, central bank data showed Tuesday.

The terms of trade index for products came to 101.34 in January, up 5.6 percent from the same month last year, according to preliminary data from the Bank of Korea (BOK).

From a month earlier, the January figure marks a 0.6 percent rise.

The index measures the amount of imports a country can purchase for each unit of exports, showing how the country's exports are doing in comparison with its imports. A reading above 100 means the country can purchase more per unit that it ships abroad.

The rise, however, was largely attributed to import prices dropping at a greater speed than those of exports.

In January, prices of imports plunged 20.9 percent on-year while export prices tumbled 17.8 percent.

Korea's exports have fallen every single month since the start of last year, again plunging 18.5 percent on-year last month, the fastest rate of drop since August 2009.

The income terms of trade index, which measures the amount of imports that can purchased with the total value of exports, slipped 2.3 percent on-year to 123.30 in January, the worst reading since 117.30 posted in September 2014.

"The income terms of trade dropped from a year earlier despite a rise in terms of trade for products as the country's overall export volume shrank," the BOK said in a press release.

In January, Korea's export volume dipped 7.4 percent from a year earlier, with imports sliding 5.9 percent on-year. (Yonhap)