S. Korea swings to current account surplus in October

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SEOUL, Nov. 27 (Yonhap) -- South Korea posted a record current account surplus in October on decreased imports and an improved service account, potentially easing downward pressure on the local currency, the central bank said Thursday.
The current account surplus reached US$4.91 billion last month, compared with a
deficit of $1.35 billion the previous month, the Bank of Korea (BOK) said in a
report. The monthly surplus is the biggest since 1980 when the central bank began
to compile related data.
In the January-October period, the country logged a cumulative current account
deficit of $9.01 billion, compared with a surplus of $5.26 billion a year
earlier, according to the bank.
"Falling prices of raw materials will help the country post a current account
surplus in November," said Yang Jae-ryong, head of the central bank's balance of
payments statistics team. "Exports are falling and imports also are on the
decline, which means the current account surplus trend will continue for the time
being."
The Finance Ministry has said sharp falls in oil prices would help the country's
current account turn back to a surplus in the fourth quarter.
On Tuesday, the ministry said November's current account is expected to post a
surplus of around $1 billion.
The country has posted shortfalls every month but two this year as high oil
prices and a weak won drove up the cost of imported goods.
The current account is the broadest measure of trade, service and investment
flows into and out of the country.
The current account surplus may help ease pressure on the local currency, which
has lost more than 38 percent against the U.S. dollar so far this year.
Widening current account deficits, continued foreign sell-offs of local stocks
and a deepening dollar shortage have dragged the won down to a decade-low versus
the dollar.
The country's goods balance posted a surplus of $2.79 billion in October,
compared with a deficit of $890 million in September, according to the central
bank.
A shortfall in the service account, which includes South Korean spending on
overseas trips, narrowed to $50 million last month from 1.24 billion the previous
month, it said.
The capital account, which tracks cross-border investments, recorded a net
outflow of $25.53 billion in October, compared with a net outflow of $4.78
billion a month earlier, as local lenders repaid part of their foreign loans.
sam@yna.co.kr
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