×

South Korea's Current Account Surplus at 3-Year High

South Korea's current account surplus hit a three-year high in April as exports grew faster than imports, central bank data showed on Friday, helping push the won up sharply to a fresh 3-week high against the dollar.

Korea, Korean Flag
CNBC.com
Korea, Korean Flag

The current account surplus rose to a seasonally adjusted $2.75 billion in April, the biggest since a $3.54 billion profit in January 2005, from a revised $77.3 million surplus in March, the Bank of Korea said.

The merchandise trade balance swung to a $3.51 billion surplus in April, the biggest since a $3.58 billion profit in August last year, from a revised $379.4 million deficit in March, the central bank said.

The won rose more than 1 percent to a session high of 1,023.8 per dollar, its strongest since touching 1,014.3 on May 7, from Thursday's close at 1,035.25.

The currency was also lifted after Vice Finance Minister Choi Joong-kyung reaffirmed that dealing with high domestic inflation led by oil and raw materials prices was a top focus for the foreign exchange authorities.

The remarks came amid a won rally this week on talk that authorities dumped about $2 billion on Tuesday to prop up the local currency in an attempt to cushion the impact of firmer oil prices on the local inflation.

Separately, a senior official at ratings agency Moody's warned that rising overseas short-term borrowing could undermine the stability of South Korean banks. But he said the government has the capability to deal with the risk.

South Korea's overseas short-term borrowing has jumped in recent years, led by banks seeking dollar forward deals at home and reflecting their heavy reliance on cheaper overseas funding.

But Bank of Korea data showed South Korea's overseas borrowing fell by a net $184.4 million in April after a net rise of $6.28 billion in March.