South Korea posted a record current account surplus for November as exports gained ground, the central bank said Friday, giving support to the already-strong local currency to the U.S. dollar.
The current account surplus reached US$6.88 billion in November, up from a revised $5.78 billion in the previous month, according to the Bank of Korea (BOK). The current account is the broadest measure of cross-border trade.
The November surplus marked the 10th straight month of a surplus run, making the accumulative surplus reach $40.97 billion in the first 11 months of this year. The combined surplus stood much higher than the BOK's 2012 surplus estimate of $34 billion.
The BOK said that the country is expected to log another surplus for December, but the size will be smaller than in November due to shortened working days and the weaker service account.
"The December surplus would be smaller, given reduced working days and a seasonal rise in overseas royalty payments," Yang Jae-ryong, the director of the BOK's monetary and financial statistics division, said at a press conference.
The widened surplus is expected to lend further support to the local currency, which has appreciated more than 7 percent to the dollar so far this year as foreign capital is flowing into Korea amid quantitative easing by major economies.
Analysts say that although the pace of the won's gain will slow next year, the local currency is widely anticipated to gain ground as advanced economies are likely to pump up efforts to loosen money for the economic recovery.
"Upward pressure on the won will continue into next year, given major economies' quantitative easing drives," said Byeon Ji-young, a currency analyst at Woori Futures Co.
"But its ascending pace will likely slow as Korea will log smaller current account surplus for next year than in 2012, and the local economy will post only a moderate recovery."
Korea's exports, which account for about 50 percent of the economy, showed some improvements in the fourth quarter, weathering the global slowdown and the won's gain.
South Korea's goods balance logged a record surplus of $6.75 billion in November, up from a revised $5.17 billion the previous month, the BOK said.
Overseas shipments rose 5.9 percent on-year to $49.63 billion and imports inched up 0.6 percent to $42.87 billion.
The service account, which includes outlays by South Koreans on overseas trips, posted a shortfall of $51.6 million last month, a turnaround from a surplus of $378.3 million in October.
Meanwhile, the capital and financial account, covering cross-border investments, posted a net outflow of $9.85 billion last month, compared with a net outflow of a revised $7.25 billion in October, the central bank said.
Earlier, the BOK forecast a smaller current account surplus for 2013 with $25 billion. The government predicted that the surplus will reach $30 billion next year, smaller than its 2012 surplus projection of $42 billion. (Yonhap News)
