Exports in March rose 19.1 percent from a year earlier on stronger demand from emerging economies, the fastest since a 22.9 percent annual rise in October last year and above market expectations for a 17.3 percent gain. "It appears exports to the United States are not weakening as sharply as expected. Demand from emerging markets remains solid and the IT industry is holding up," said Goh You-sun, an economist at Daewoo Securities.
"Exports growth should remain resilient for some time. This will make the Bank of Korea delay a rate cut. They can cut once, likely in the second quarter, but that should be it for this year," she said.
Imports in March rose 25.9 percent from a year before, below a 26.5 percent growth forecast in a Reuters poll and decelerating from a revised 27.6 percent jump in February, the Ministry of Knowledge Economy data showed.
The trade deficit in the month narrowed to $0.67 million from a revised $1.25 billion shortfall in February, although it was the third month in a row that Asia's fourth-largest economy posted a monthly trade deficit.
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The won rose more than 1 percent at one point on the day against the dollar to a session high of 980.0 before settling slightly back to 981.2.
The exports data came about a week before the Bank of Korea, which has held interest rates steady for the past seven months in a row after seven increases, reviews rates on April 10.
The central bank separately said in an analysis report that easing inflation expectations has become very important in ensuring stable inflation in the future, stressing the importance of inflation over economic growth.
Stock and bond traders shrugged off the trade data, with the stock market's benchmark KOSPI up 0.6 percent and the June treasury bond futures up 4 ticks on the day, steady from their earlier levels.
Traders have said investors, especially those in bonds, would not change their positions quickly before they see March inflation data due later in the day.
The median forecast from a Reuters poll was for the annual inflation rate in March to stand at 3.7 percent, marking the fourth month in a row that the inflation stays above the central bank's target band of 2.5 percent to 3.5 percent.
The Knowledge Economy Ministry said in a statement March exports were led by firmer prices of oil products, increased demand for mobile phones, flat-screen panels and machinery mainly from emerging countries such as China.
For the first 20 days of March, exports to China rose 31.5 percent over a year before while shipments to the Association of Southeast Asian Nations member countries by a combined 35.8 percent, the ministry data showed.
South Korea, which sends about two-fifths of total exports to China and the United States, is the first major Asian country releasing monthly foreign trade data.