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UPDATE 1-S.Korea Nov balance of payments improves

Published 12/29/2008, 07:16 PM
Updated 12/29/2008, 07:20 PM

(Recasts throughout)

SEOUL, Dec 30 (Reuters) - South Korea's current account swung to a deficit in November from a surplus in October on a seasonally adjusted basis, hit by slowing exports in the face of a global recession, central bank figures showed on Tuesday.

The current account turned to a seasonally adjusted deficit of $0.35 billion in November from a revised $3.26 billion surplus in October as the goods trade account swung to a $0.72 billion shortfall in November from a $1.87 billion surplus in October.

But overall balance of payments figures from the Bank of Korea, which are not adjusted for seasonal patterns, showed the capital flight out of Asia's fourth-largest economy was gradually easing, which analysts say could lend some relief to the won.

The balance of payments -- which combines the current account, capital and financial account and others -- set a $10.9 billion shortfall in November, about half of the $20.0 billion shortfall posted in October, the data showed.

"A continuous current account surplus is definitely positive to the won, at leat for the short term," said Jeong My-young, a currency strategist at Samsung Futures Inc, referring to the country posting its second consecutive month of surplus before seasonal adjustment.

"But the merchandise trade account is expected to suffer, given a global recession, and it is difficult to say the won would rise sharply over the long term," she added.

For the first 11 months of the year, South Korea produced a seasonally adjusted current account deficit of $8.15 billion, reversing from a $7.02 billion surplus for the same period in 2007, the central bank figures showed.

The data underlined expectations the country will produce its first full-year current account deficit in 11 years in 2008.

The won has lost more than a quarter of its value against the dollar this year on worries about the country's worsening balance of payment position, ranking among the region's worst performers. (Reporting by Cheon Jong-woo; Editing by Yoo Choonsik)

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