South Korea's terms of trade improved from a year earlier in July due to bigger declines in import prices compared with drops in export prices, central bank data showed Tuesday.

The terms of trade index for products came to 100.09 last month, up 0.4 percent from a year earlier, according to preliminary data from the Bank of Korea.

The index measures the amount of imports a country can purchase for each unit of its exports, showing how the country's exports are doing in comparison with those of others.

In July, export prices fell 8.3 percent from a year ago, while import prices dropped 8.6 percent, the BOK data showed.

The income terms of trade rose 1.2 percent year-over-year to 139.74 last month from 138.14. The income terms of trade measures the amount of imports the country can purchase with the total value of its exports, the data showed. (Yonhap)