(LEAD) S. Korea logs current account surplus for 3rd month in April

(ATTN: UPDATES with more details and analyst's remarks in paras 4,5,8)
By Kim Soo-yeon
SEOUL, May 28 (Yonhap) -- South Korea posted a current account surplus for the
third straight month in April, but the surplus narrowed mainly on increased
spending on overseas travel, the central bank said Thursday.

The current account surplus reached US$4.28 billion in April, down from a record
$6.65 billion in March, the Bank of Korea (BOK) said in a report. The current
account is the broadest measure of cross-border trade.
The current account has been in the black since February as the trade balance is
improving due to a sharp decline in imports. The data is likely to give further
support to the Korean currency, which has gained 24 percent against the U.S.
dollar since March 2 when the won dipped to an 11-year low.
"The current account surplus would give some support to the won, but given
geopolitical risks from North Korea, the local currency could face some
volatility in the near term," said Kim Jae-eun, an economist at Hana Daetoo
Securities Co. "Toward the second half, the surplus will likely narrow as the
stabilizing won increases imports and spending on overseas travel."
The goods balance posted a surplus of $6.17 billion in April, compared with a
$6.98 billion surplus the previous month, as imports declined more sharply than
exports.
Overseas shipments declined 22.6 percent on-year to $30.3 billion last month and
imports plunged 35.7 percent to $24.1 billion.
The shortfall in the service account, which includes South Korean spending on
overseas trips, widened to $1.11 billion in April, compared with $645.7 million a
month earlier, as the strengthening Korean won prompted more people to travel
overseas.
The income account, which tracks wages for foreign workers and dividend payments
overseas, logged a deficit of $856 million last month, up from a $215.7 million
deficit a month earlier.
The capital account, which tracks cross-border investments, posted a net inflow
of $2.54 billion last month, compared with a net outflow of a revised $2.71
billion a month earlier, due mainly to a large amount of overseas debt sales.
Last month, the government issued $3 billion in dollar-denominated currency
stabilization bonds, the first state debt sale since November 2006.
The central bank said in early April that Korea is forecast to post a current
account surplus of around $18 billion this year, down from a previous estimate of
$22 billion. The government predicted that the surplus will likely reach around
$16 billion.
Last year, the country posted its first annual current account shortfall in 11
years of $6.41 billion as soaring oil prices raised import bills.
sooyeon@yna.co.kr
(END)

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