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South Korea has longest current account surplus for 47 months

Staff writer |
South Korea kept the longest current account surplus for 47 months in a row despite falling exports, central bank data showed.

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Current account surplus was $7.06 billion in January, maintaining the surplus for 47 months since March 2012, according to the Bank of Korea (BOK). It was the longest monthly surplus in the country's history.

The continued surplus came despite the double-digit fall in exports, boosting concerns over the recession-type surplus, which may put upward pressure on the local currency and resulted in additional burden for export recovery.

Exports tumbled 15.8 percent from a year earlier to $37.9 billion in January, while imports plunged 23.1 percent to $29.79 billion.

Thanks to faster reduction in imports than exports, trade surplus for goods reached $8.11 billion in January, up from a surplus of $6.31 billion a year earlier.

The BOK attributed the export slump to soft demand in emerging economies and lower prices of crude oil and steel products.

Based on customs data, display panel exports tumbled 38.5 percent in January from a year earlier, with exports of oil products and ships plunging 38 percent and 33.2 percent each.

Exports to the European Union increased 7.2 percent, but those to Latin America, the Middle East and Southeast Asian nations posted a double-digit decline. Shipments to China, South Korea's largest trading partner, dropped 21.6 percent in January.

The service account balance, which measures the flow of travel, transport costs and royalties, logged a deficit of $1.9 billion in January due to deficits in travel and transport accounts, which reached $880 million and $160 million respectively.

Intellectual property rights recorded a surplus of $20 million in January, with the construction account logging a surplus of $690 dollars.

Surplus in primary income account, which gauges investment and interest incomes as well as salary, registered a surplus of $1.25 billion in January on continued interest income and wages.

Financial account, which gauges cross-border capital flow without transactions in goods and services, posted an outflow of $6.48 billion in January.

Direct investment logged an inflow of $70 million doars in January due to a rise in foreign investment into the country.

Portfolio investment, which includes stock and bond transactions, recorded an outflow of $4.65 billion in January as foreigners kept falling local securities for eight straight months.

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