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Korea Logs Current Account Surplus in September

According to Yonhap News,

(Seoul = Yonhap News) By Kim Soo-yeon

South Korea logged a current account surplus for the 20th straight month in September as trade gains increased and the service account improved, the central bank said Tuesday.

The current account surplus reached US$6.57 billion in September, up from a revised $5.68 billion in the previous month, according to the Bank of Korea (BOK). The current account is the broadest measure of cross-border trade.

Korea has maintained a current account surplus since February 2012. The combined surplus amounted to $48.79 billion in the first nine months of this year, the central bank said.

In October, the BOK revised up its 2013 current account surplus estimate to a record high of $63 billion and its 2014 surplus forecast currently stands at $45 billion.

The central bank downplayed some concerns that the surplus pattern may reflect the economic slowdown as exports and imports declined last month.

In September, the goods balance posted a wider surplus of $5.7 billion from $5.28 billion in August, but on an annual basis, exports fell 2.7 percent on-year and imports declined 3.5 percent.

The BOK said that exports fell last month due to reduced working days stemming from the Chuseok holiday, adding that overseas shipments will likely remain solid in October, driven by brisk sales of mobile devices and auto parts.

"Given that the monthly surplus has amounted to around $5 billion to $6 billion, it will be possible to achieve the BOK's yearly estimate for the current account surplus," Jung Young-taek, the director general of the BOK's economic statistics division, told reporters.

The underlying trend of the surplus may help strengthen the local currency, which has risen more than 5 percent against the U.S. dollar since mid-May, analysts said.

South Korea has differentiated itself from other emerging countries that have been struggling to tackle massive foreign capital outflows and currency weakness.

But Korea's strong economic fundamentals are also serving as the main factor in luring cross-border capital funds, putting upward pressure on the won.

The service account, which includes outlays by South Koreans on overseas trips, posted a surplus of $872.5 million last month, compared with a surplus of $100.6 million in August.

The capital and financial account, which covers cross-border investments, posted a net outflow of $4.52 billion in September, compared with a net outflow of a revised $7.66 billion in the previous month, the BOK said.

Foreign investors' buying spree of local stocks led the portfolio investment account to widen to a net inflow of $5.99 billion in September. In August, a net inflow of such funds amounted to $1.44 billion.

Copyrights Yonhap News Agency. All Rights Reserved.

Source Text

Source: Yonhap News (Oct. 29, 2013)

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