Roundup: S.Korea keeps longest current account surplus for 47 months

South Korea kept the longest current account surplus for 47 months in a row despite falling exports, bolstering up worries about the so-called "recession-type" surplus, central bank data showed on Wednesday.

Current account surplus was 7.06 billion U.S. dollars 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 dollars in January, while imports plunged 23.1 percent to 29.79 billion dollars.

Thanks to faster reduction in imports than exports, trade surplus for goods reached 8.11 billion dollars in January, up from a surplus of 6.31 billion dollars 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 dollars in January due to deficits in travel and transport accounts, which reached 880 million dollars and 160 million dollars respectively.

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

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

Direct investment logged an inflow of 70 million dollars 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 dollars in January as foreigners kept falling local securities for eight straight months.

Foreign capital outflow from the local financial market may put additional burden on the BOK's rate-setting decision scheduled for next Thursday. Additional rate cut could trigger a foreign fund exodus from the financial market.

Pressures mounted for the BOK to cut rates amid weak economic indicators unveiled recently. South Korea's exports posted a double-digit decline for three straight months through February, and industrial production turned downward in January. Retail sales and facility investment also declined in January.

Despite negative economic indicators, further rate cuts by the BOK may trigger foreign capital exodus. In addition, the rate cut from the current rate of 1.5 percent, the lowest level in the country's history, would increase the already record-breaking household debts which will weigh down on private consumption over the long run.

Meanwhile, other investment income, including trade credit and foreign debts, registered an outflow of 0.3 billion dollars in January due to repayment of foreign debts. Enditem