S.Korea's current account surplus hits record high on solid exports

South Korea's current account surplus hit a fresh record high last month when exports topped 50 billion U.S. dollars for the first time in the country's history, central bank data showed Thursday.

Current account surplus reached 9.51 billion U.S. dollars in October, up from a 6.54 billion dollar surplus in the previous month, according to the Bank of Korea (BOK). The current account balance stayed in black for 21 straight months.

Exports jumped 8.2 percent from a year earlier to 52.23 billion dollars in October due to strong demand for tech and auto products.

Imports increased 5.6 percent on-year to 45.2 billion dollars, resulting in 7.03 billion dollars of trade surplus last month, up from a 5.67 billion dollar surplus in the previous month.

Despite the strong local currency, the country's exports breached the 50 billion dollar mark on the back of robust demand for home-made tech and auto products. The won/dollar exchange rate declined to 1,056.4 won on Nov. 19, close to this year's low of 1, 054.3 won. The currency surged to the highest in around five years against the Japanese yen on Nov. 22.

According to the customs data, tech exports expanded 11.9 percent in October from a year earlier after rising 6.6 percent in the previous month. Shipments of cars and auto parts jumped 21.1 percent last month after falling 9.3 percent in the previous month.

"Exports exceeded 50 billion dollars thanks to economic recovery in advanced economies. Stable global prices of raw materials helped boost trade surplus," Jung Joon, director of the BOK's monetary and financial statistics division, told reporters.

The imports increased last month after falling 4 percent in September, hinting at a rebound in domestic demand. Capital goods imports jumped 12.4 percent in October due to solid demand for machinery, and consumer goods imports increased 16 percent on the back of demand for foreign luxury cars.

Surplus in the service account, which measures the flow of travel, transport costs and royalties, widened to 1.65 billion dollars in October from 870 million dollars in the previous month. Transportation and construction sectors showed robust surplus, and deficit in travel and business services reduced last month.

Jung said that there has been a structural change in the service account sector, noting that the travel account deficit declined sharply following the global financial crisis.

Overseas direct investment in the past began to generate profits, Jung said, noting that it reduced the business services deficit and helped improve the overall service account balance.

Primary income account, which includes monthly salaries and investment income, expanded to 790 million dollars in October from 320 million dollars in September due to a fall in dividend payment to foreign investors.

Financial account, which gauges cross-border investment, posted an outflow of 10.09 billion dollars in October, up from a 4.54 billion dollar outflow in the prior month.

Net outflow in other investment account, including trade credit and foreign debts, jumped to 10.66 billion dollars in October from 7.43 billion dollars in the previous month as local financial institutions increased loans in foreign currency.

Portfolio investment, including stock and bond transactions, logged an inflow of 4.5 billion dollars last month after posting an inflow of 5.99 billion dollars in the prior month.

Direct investment shifted into an inflow of 50 million dollars in October from an outflow of 1.23 billion dollars in the prior month.