SEOUL, Oct. 28 (Xinhua) -- South Korea' current account surplus rebounded to 3.1 billion U.S. dollars last month after contracting to a 7-month low a month earlier as exports recovered its growing trend, the central bank said Friday.
The surplus reached 3.1 billion dollars in September, a turnaround from a revised 292.6 million dollars tallied in the previous month, the Bank of Korea (BOK) said in a statement. For the first nine months of this year, the surplus amounted to a combined 15.3 billion dollars.
The September figure was a rebound from the 7-month low tallied a month before, and it has remained in the black for the 19th consecutive month. The current account is the broadest measure of international trade, including goods, services and investment income.
The strong turnaround was mainly attributable to recovery in exports, which contracted in August after local firms advanced their export date ahead of summer vacation.
STRONG EXPORTS
The goods account surplus surged to 2.37 billion dollars in September from 371.5 million dollars a month earlier, according to the BOK. For the first nine months, the accumulated goods surplus reached 20.98 billion dollars.
Exports, which account for 50 percent of the Asia's No.4 economy, expanded to 47.5 billion dollars last month from 45.6 billion dollars registered in the prior month. Brisk demand for locally-made automobiles, metal products and petroleum products boosted last month's exports.
"South Korean exports drew a better picture in September due partly to the Japanese yen that has recently peaked to a record- high level. The October export is expected to continue its growing trend," Kim Young-bae, director general of the BOK's economic statistics department, told reporters.
Kim, however, noted that capital goods imports contracted significantly last month, saying it was due to local firms that delayed facilities investment amid lingering uncertainties caused by Europe's debt crisis.
The service account, which measures the flow of travel, transport costs and royalties, turned into the black last month with a surplus of 70.6 million dollars from a deficit of 577.9 million dollars a month earlier. A reduction in the travel account deficit contributed to the turnaround in the service account balance, according to the BOK.
The primary income account, including monthly salaries and investment income, logged a surplus of 543 million dollars in September, down from 699.6 million dollars a month before. An increase in interest payments led to a falling surplus of the account.
FOREIGN DEBT REDUCTION
Outflow in the financial account, which gauges cross-border investment, widened to 4.68 billion dollars in September from 1.73 billion dollars a month earlier as banks repaid their foreign debts and increased investment in external assets.
Other investment account, including trade credits and foreign debts, shifted to a net outflow of 17.09 billion dollars last month from a net inflow of 4.64 billion dollars the previous month.
Local lenders paid back short-term foreign debts, while borrowing long-term funds from overseas. In September, banks repaid a net 7 billion dollars of external debts that mature in one year or less after paying back a net 1.18 billion dollars a month earlier, but they borrowed a net 3.81 billion dollars of long-term debts with a maturity of one year or more, up from a net borrowing of 1.88 billion dollars tallied in August.
"The 17.09-billion dollar outflow from the other investment balance row is the most prominent feature. Short-term external borrowing by banks typically dominates the other investment balance row. The macroprudential measures taken to discourage short-term external borrowing may be bearing fruit," said Tim Condon, head of Asia research at ING in Singapore.
Portfolio investment, including stock and bond investment, logged a net inflow of 1.77 billion dollars last month from a net outflow of 2.92 billion dollars a month before. Foreign investors reduced sales of local stocks, while keeping their buying streak on local bonds, according to the BOK.
Net outflow in the foreign direct investment expanded to 2.1 billion dollars in September from 1.04 billion dollars in August as local residents increased their investments overseas.
Source:news.xinhuanet