S. Korea's current account surplus hits record high in May

By Kim Soo-yeon

SEOUL, June 27 (Yonhap) -- South Korea's current account surplus hit a record high in May as exports of tech products remained solid amid the local currency's weakness to the U.S. dollar, the central bank said Thursday.

The current account surplus reached US$8.64 billion in May, up from a revised surplus of $3.93 billion the previous month, according to the Bank of Korea (BOK). The current account is the broadest measure of cross-border trade.

The May reading marked the 16th straight month of a surplus run and the country's cumulative surplus amounted to $22.54 billion in the first five months of the year, the central bank said.

The record surplus came as the Korean currency turned weaker against the U.S. dollar amid speculation over a possible reduction of the U.S. monetary easing, aiding Seoul's exports.

The global financial markets remained on edge amid prospects that the U.S. Federal Reserve may slow the pace of its bond-buying purchasing program later this year. The won has fallen about 7 percent per the greenback so far this year.

In May, the balance of Korea's goods posted a record surplus of $7.27 billion, up from a revised surplus of $3.54 billion in April.

Last month, exports rose 7.4 percent on-year to $49.6 billion while imports declined 4.8 percent to $42.3 billion.

Seoul's exports to the U.S. jumped 21.6 percent on-year to $5.75 billion. But its shipments to Japan declined 11.6 percent to $2.74 billion amid lingering concerns that the yen's slide to the won would sap Korea's exports.

The service account, which includes outlays by South Koreans on overseas trips, posted a surplus of $1.13 billion last month, compared with a surplus of $1.45 billion in April.

The primary income account, which tracks wages of foreign workers and dividend payments overseas, logged a surplus of $193.6 million in May, a turnaround from a deficit of $1.09 billion in April.

In March and April, offshore investors usually send dividend payments by Korean companies that close their books in December.

Meanwhile, the capital and financial account, covering cross-border investments, posted a record net outflow of $11.6 billion in May, compared with a net outflow of $2.57 billion the previous month, the central bank said.

In April, the BOK revised up the 2013 current account surplus estimate to $33 billion. Last year, Korea's current account surplus reached a record high of $43.14 billion.

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