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Roundup: S.Korea's current account balance stays in black for 48 months

Xinhua, April 1, 2016 Adjust font size:

South Korea's current account balanced stayed in the black for 48 months in a row, keeping the longest monthly surplus due to a faster fall in imports than exports that is called recession-type surplus, central bank data showed on Friday.

Current account surplus, the broadest measure of cross-border capital flow, reached 7.51 billion dollars in February, almost unchanged from the previous month, according to the Bank of Korea (BOK). It marked a surplus for 48 months from March 2012.

Trade terms improved as cheap crude oil helped lower energy costs and pull down imports at a faster clip than exports.

Dubai crude, South Korea's benchmark, averaged 29.6 U.S. dollars per barrel in February, falling sharply from 55.6 dollars a year earlier.

Imports tumbled 13.9 percent from a year ago to 28.65 billion dollars in February thanks to cheaper oil, while exports shrank 9.3 percent to 36.55 billion dollars. Trade surplus for goods were nearly unchanged at 7.9 billion dollars from the previous month.

The surplus trend boosted worries as the export-driven South Korean economy may be weighed down by the local currency's appreciation to the dollar amid the prolonged current account surplus. The stronger won would weaken local exporters' price competitiveness.

Service account balance, which measures the flow of travel, transport costs and royalties, logged a deficit of 1.27 billion dollars in February compared with a deficit of 1.93 billion dollars in January.

The reduced deficit was attributable to reduced travel deficit. Construction sector also posted a surplus of 700 million dollars in February.

Surplus in primary income account, which gauges investment and interest incomes as well as salary, reduced to 850 million dollars in February amid lower dividend income.

Financial account, which gauges cross-border capital flow without transactions in goods and services, posted an outflow of 9.5 billion dollars in February.

Direct investment logged an outflow of 1.55 billion dollars as local residents increased investment into overseas while foreigners reduced investment into South Korea.

Portfolio investment, which includes stock and bond transactions, recorded an outflow of 6.2 billion dollars in February. Local residents sharply increased purchases of foreign securities, while foreigners reduced sales of local stocks and bonds.

Other investment income, including trade credit and foreign debts, registered an outflow of 2.56 billion dollars due to repayment of foreign debts. Enditem