S. Korea logs current account surplus for 2nd month in Nov.By Kim Soo-yeon

SEOUL, Dec. 30 (Yonhap) -- South Korea posted a current account surplus for a second month in November, the central bank said Tuesday, raising hopes it could help ease downward pressure on the sliding local currency.

The current account surplus reached US$2.06 billion in November, down from a
revised record $4.75 billion surplus the previous month, the Bank of Korea (BOK)
said in a report. The surplus sharply narrowed as a global economic slump dented
exports.
In the first 11 months of this year, the country posted a current account
shortfall of $7.12 billion. The current account is the broadest measure of trade,
service and investment flows into and out of the country.
The surplus comes as the South Korean currency has declined about 28 percent to
the U.S. dollar so far this year. A cumulative shortfall of the current account,
coupled with rising overseas debt and sell-offs of local stocks by foreign
investors, has been putting downward pressure on the local currency.
The local currency closed at 1,259.50 won to the greenback, up 3.5 won from
Monday's close.
The BOK predicted that the country's current account will remain in the black in
December.
"Although exports are declining as they are hit by a global recession, the
country's current account will likely remain in the black as falling oil prices
are decreasing imports," Yang Jae-ryong, head of the central bank's balance of
payments statistics team, told a press conference.
"Although the current account surplus halved from the previous month, the worst
may have already passed, which could help stabilize the foreign exchange market,"
said Chun Chong-woo, a senior economist at SC First Bank.
The goods balance posted a surplus of $994.6 million in November, down from a
revised $2.63 billion surplus the previous month as exports sharply declined due
to the global recession while falling oil prices decreased imports.
Customs-cleared exports declined 19 percent year-on-year to $29 billion last
month and imports fell 14.9 percent to $28.9 billion.
The shortfall of the service account, which includes South Korean spending on
overseas trips, widened to $130 million in November, compared with a revised
$54.8 million a month earlier.
The capital account, which tracks cross-border investments, posted a net outflow
of $12.1 billion in November, down from a record net outflow of $24.8 billion a
month earlier as repayment of foreign loans by local banks decreased amid
improving overseas borrowing conditions.
Economists, however, remained cautious about faltering exports, which account for
about 60 percent of the local economy.
"The narrowed current account surplus raised concerns over falling exports. A
global recession has spilled over into emerging markets and it may not be easy
for South Korea to post a large current account surplus next year as expected,"
said Jun Min-kyu, an economist at Korea Investment & Securities Co.
The central bank said that the country is expected to log a current account
shortfall of $4.5 billion this year, marking the first annual shortfall in 11
years. But next year, the country's current account is expected to swing to the
black, reaching around $22 billion, it added.
sooyeon@yna.co.kr
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