Current account surplus likely to narrow amid energy costs, slowing demand: minister

SEOUL, Sept. 5 (Yonhap) -- South Korea's finance minister said Monday the country's current account surplus could narrow as the trade balance will likely deteriorate amid a hike in energy prices and slowing global demand.

Finance Minister Choo Kyung-ho made the remark at the start of an emergency meeting on the economy with the central bank chief and financial regulators to discuss policy coordination amid the won's sharp weakness against the U.S. dollar.

Choo said as the current account balance will likely show volatility for the time being due to heightened external economic conditions, the government will closely monitor cross-border capital flows.

"There is a possibility that the country's current account surplus could narrow as the trade balance would deteriorate amid a hike in energy prices and slowing demand from China and others," he noted.

The Korean currency slid to the 1,360 level against the U.S. dollar for the first time in more than 13 years Friday amid the Federal Reserve's aggressive monetary tightening and a widening trade deficit.

The nation posted a trade deficit of US$9.47 billion last month, the largest amount to date. It logged a trade deficit for the fifth straight month in August for the first time in nearly 14 years due to high energy costs.

South Korea posted a current account surplus of $24.8 billion in the first half, smaller than a surplus of $41.8 billion a year ago, according to central bank data.

Last month, the Bank of Korea forecast the current account surplus to reach $37 billion this year.

Choo said authorities will jointly monitor global financial markets and economic situations during the extended Chuseok fall harvest holiday that starts Friday.

"We will take stern actions against market-disturbing behavior in a timely manner," he added.

sooyeon@yna.co.kr
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