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S. Korea logs current account surplus for 9th month in Oct.

All Headlines 08:00 November 27, 2009

By Kim Soo-yeon

SEOUL, Nov. 27 (Yonhap) -- South Korea posted a current account surplus for the ninth straight month in October on brisk exports and decreased spending on overseas travel, the central bank said Friday.

The current account surplus reached US$4.94 billion last month, up from a revised $4.03 billion in September, the Bank of Korea (BOK) said in a report. In the first 10 months of this year, the accumulative surplus amounted to $37 billion.

The country's current account, the broadest measure of cross-border trade, has remained in the black since February as imports have fallen faster than exports amid the global downturn.

The surplus is widely forecast to lend further support to the Korean won which has gained about 36 percent since hitting an 11-year low in early March on the back of improving exports and capital inflows by foreign investors.

The goods balance posted a surplus of $5.72 billion in October, compared with a $5.28 billion surplus for the previous month. The country logged a record goods balance surplus of $6.98 billion in March.

Overseas shipments declined 5.5 percent on-year to $35.9 billion last month and imports fell 14.7 percent to $30.2 billion.

A shortfall in the service account, which includes outlays by South Koreans on overseas trips, narrowed to $1.13 billion in October, compared with $1.63 billion a month earlier.

The income account, which tracks wages for foreign workers and dividend payments overseas, logged a surplus of $541.2 million last month, down from $548.1 million in September.

The capital account, covering cross-border investments, posted a net inflow of $1.54 billion in October, sharply down from $7.2 billion the previous month.

The bank revised up its forecast of the country's current account surplus this year in early July. It said Korea is forecast to post a current account surplus of around $29 billion in 2009, up from its previous estimate of $18 billion.

On Nov. 12, BOK Gov. Lee Seong-tae said that South Korea may see the current account surplus reach up to $40 billion this year although it will likely sharply decline next year on rising imports.

Last year, South Korea registered its first annual current account shortfall in 11 years of $6.41 billion as a sharp gain in oil prices raised import bills.


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