South Korea’s current-account surplus narrowed to its lowest level in seven months in August as the total amount of exports fell from previous months due to fewer working days during the summer holiday season.
The surplus was $401.3 million, compared with a revised $3.77 billion in July, the Bank of Korea said in a statement in Seoul today. The current account is the broadest measure of trade, tracking goods, services and investment income.
The Bank of Korea expects demand from emerging economies to help the nation maintain a current-account surplus this year even as Europe’s debt woes and a faltering U.S. recovery dim the outlook for Asian exports. The surplus may help the won recover after weakening, according to economist Lee Sung Kwon.
“The continued surplus in the current account will help the Korean won rebound from the recent slump,” Lee at Shinhan Investment Corp. in Seoul, said before the report. “We can expect the won to gain faster should global uncertainties recede, especially over Europe’s debt issue.”
South Korea’s currency rose 0.25 percent 1,170.59 per dollar yesterday in Seoul, according to data compiled by Bloomberg. The won is still down 8.3 percent for the month, Asia’s worst performer, and touched a one-year low of 1,196.13 on Sept. 23.
The surplus on traded goods narrowed to $480.2 million last month from a revised $4.73 billion in July, today’s report showed. The services account deficit narrowed to $577.9 million in August, compared with a deficit of $690.9 million in July.
Total exports on a customs-cleared basis rose 25.9 percent to $45.94 billion last month from a year earlier, compared with a revised 21.7 percent gain to $49.18 billion in July, according to today’s statement. Imports climbed 28.9 percent after expanding 25 percent.
Overseas shipments probably gained 16.6 percent this month from a year ago after expanding 25.9 percent in August, according to the median forecast of 11 economists surveyed by Bloomberg News. The latest monthly trade data will be released on Oct. 1.
Bank of Korea Governor Kim Choong Soo and his board left the benchmark interest rate unchanged at 3.25 percent for a third straight month on Sept. 8 as the risk of the global economy faltering outweighed inflation concerns. Consumer prices surged 5.3 percent in August, the highest in three years, exceeding the central bank’s 4 percent limit for the eighth straight month.
To contact the reporter on this story: William Sim in Seoul at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Panckhurst at email@example.com