SEOUL: South Korea posted the longest monthly surplus in current account balance despite the fall in exports that was offset by faster decline in imports amid cheaper oil, central bank data showed Tuesday.
The surplus trend means a continued inflow of foreign capital into South Korea, which put an upward pressure on the local currency to the U.S. dollar and weighed down on the country’s exports.
Current account surplus was 8.14 billion U.S. dollars in April, up 13.7 percent from a year earlier, according to the Bank of Korea (BOK). It was down 22 percent from a month ago.
For the first four months of this year, the surplus amounted to 31.5 billion dollars. The BOK set its outlook for the 2015 current account surplus at 96 billion dollars.
The country’s current account balance has stayed in black for 38 months since March 2012, marking the longest monthly surplus in the country’s history. The economy logged the surplus of identical 38 months from June 1986.
The surplus trend reflected no optimistic sign for the economy as the continued surplus was caused by low crude oil prices and the subsequent drop in imports.
Imports plunged 17.9 percent from a year earlier to 37.82 billion dollars in April, faster than exports that declined 11.2 percent to 50.38 billion dollars.
Trade surplus for goods increased from 11.25 billion dollars in March to 12.56 billion dollars in April, marking the largest monthly figure in the country’s history.
The largest trade surplus, caused by less imports than exports, put an upward pressure on the local currency to the dollar and worsening the price competitiveness of domestic exporters.
Service account balance, which measures the flow of travel, transport costs and royalties, logged a deficit of 1.13 billion dollars in April from 0.97 billion dollars in March on an increase in the travel account deficit.
The primary income account, which includes monthly salaries and investment income, turned from a surplus of 0.53 billion dollars in March to a deficit of 2.84 billion dollars in April due to a rise in dividend payment to foreign investors.
Financial account, which gauges cross-border capital flow without transactions in goods and services, logged an outflow of 10.06 billion dollars in April, down from a 11.02 billion-dollar outflow in March.
Direct investment registered an outflow of 1.97 billion dollars in April, down from a 2.39 billion-dollar outflow in March.
Portfolio investment, which includes stock and bond transactions, recorded an outflow of 0.14 billion dollars in April, sharply down from an outflow of 1.21 billion dollars after foreigners increased holdings of local stocks.
Other investment account, including trade credit and foreign debts, posted an outflow of 4.85 billion dollars in April, almost unchanged from the prior month.
