South Korea posted a current account surplus in May for the fourth consecutive month, with the amount of surplus contracting as the service and current transfer accounts marking deficits, the central bank said on June 26.
According to the Bank of Korea (BOK), the current account topped a 3.63 billion-U.S. dollar surplus in May, edging down from a 4.25 billion-U.S. dollar surplus a month earlier.
The current account has been standing in positive territory since February mainly due to imports falling faster than exports amid a slump in domestic demands, the BOK said.
According to the BOK, while the goods account and the income account stood in the black, the service account's deficit widened from a month earlier and the current transfer account marked a net inflow.
The current account, the broadest measure of a nation's trade in goods and services, is one of the components of the nation's total payment flows, or the balance of payments, and is composed of the goods, service, income and current transfer account.
Meanwhile, the nation's capital account, the other component of the balance of payments, posted a new inflow of 6.72 billion U.S. dollars, expanding from a 2.16 billion-U.S. dollar a month earlier.
"The rise in the May capital account came as local banks increased foreign borrowing while overseas investors remained net buyers of local stocks and bonds," an official at the BOK explained.
The South Korean government on Thursday revised up its earlier projection on the 2009 current account surplus, from a 16 billion-U.S. dollar surplus to 25 billion U.S. dollars, while the BOK expects a surplus of 18 billion U.S. dollars.