South Korea's current account surplus reduces on 1 off factor

South Korea's current account surplus reduced last month on the back of less working days caused by the Lunar New Year's holiday, central bank data showed Thursday. Current account surplus was 3.61 billion U.S. dollars in January, down from a 6.41-billion-dollar surplus in the prior month, according to the Bank of Korea (BOK). The current account balance stayed in the black for 24 straight months, but it fell to the lowest in 11 months. The surplus declined as the Lunar New Year's holiday moved to January this year from February last year, pulling down last month 's business days by two days from a year ago. Trade surplus dropped to 3.32 billion dollars in January from 5.69 billion dollars in December last year, but the seasonally adjusted trade surplus, which excludes seasonal one-off factors, increased from 6.55 billion dollars to 7.43 billion dollars over the cited period. Exports, which account for around half of the economy, increased 0.2 percent from a year earlier to 47.24 billion dollars in January, but imports declined 1.4 percent to 43.92 billion dollars last month. Daily average exports, which exclude a change in business days, jumped 8.9 percent in January from a year earlier on the customs basis. "The main seasonal factor was a fall in working days. Except for the factor, daily average exports gained 8.9 percent," Jung Joon, director of BOK's monetary & financial statistics division, told reporters. Despite worries about emerging economies, South Korea's January exports showed a better picture than expected, Jung said, noting the decline in exports to Japan came from the depreciation of the Japanese yen that reduced exports value converted into the dollar. Worries emerged after currencies of some emerging economies, including Argentina and Turkey, plunged against the dollar after the U.S. Federal Reserve decided to scale back its monthly bond purchases by 10 billion dollars to 75 billion dollars in December last year. The Fed cut its monetary stimulus to 65 billion dollars. Exports to China, the country's largest trading partner, managed to rise 0.7 percent on year in January, and those to Southeast Asian nations increased 2.9 percent. Outbound shipments to Europe surged 24.8 percent, but those to Japan and the United States slid 19.8 percent and 2 percent respectively. The service account balance, which measures the flow of travel, transport costs and royalties, turned into a deficit of 590 million dollars in January from 440 million dollars of surplus in the prior month. It was attributed to a fall in surplus of transport and construction surpluses. Surplus in primary income account, which includes monthly salaries and investment income, rose to 690 million dollars in January from 420 million dollars in the previous month on the back of a rise in interest income. Financial account, which gauges cross-border investment, posted an outflow of 2.18 billion dollars in January, down from an outflow of 6.39 billion dollars in the prior month. Direct investment shifted into an inflow of 1.13 billion dollars in January from an outflow of 1.51 billion dollars in December last year due to a surge in foreign direct investment into South Korea. Portfolio investment, including stock and bond transactions, logged an outflow of 4.27 billion dollars last month from an outflow of 5.16 billion dollars a month earlier as foreigners returned to the domestic financial market to buy securities. Other investment account, including trade credit and foreign debts, registered an inflow of 3.7 billion dollars last month, up from an inflow of 170 million dollars a month ago as local financial institutions lifted borrowing from overseas.