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

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(Globalpost/GlobalPost)

By Kim Soo-yeon

SEOUL, June 27 (Yonhap) -- South Korea's current account surplus hit a record high in May as exports posted solid growth, 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 BOK said that the May surplus came as exports remained solid, while imports declined on falling oil prices.

"Falling oil costs slowed demand for imports, improving the current account surplus," Kim Young-bae, the director general of the BOK's economic statistics division, said at a press conference.

Kim said that the surplus for June will be smaller than that of May, but Korea is expected to continue to see a surplus trend.

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.

Kim said that exports may post a small decline in June, but the average value of daily overseas shipments would remain in positive territory.

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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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130626/s-koreas-current-account-surplus-hits-record-high-may-1