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Recent Trend of Foreign Direct Investment |
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$3 Bil. in Capital Account Surplus Recorded in Jan. KOREA Times 2000/05/08 KOREA TIMES 2000/03/08 Korea recorded $3 billion in capital account surplus in January, the largest since April 1996, a factor that is contributing to the appreciation of the Korean won against the U.S. dollar at the expense of the country's export competitiveness. According to the Bank of Korea (BOK) yesterday, the January capital account showed that inflow outstripped outflow by $3.2 illion, the largest. amount month-on-month since April 1996 when the surplus marked $4.75 billion. The $3 billion in capital surplus is attributed to an increase in foreign direct investment, foreign funds flowing into the domestic stock markets among others, BOK officials said. As for investment account, net inflow of foreign direct investment amounted to $580 million, net purchases of stocks accounted for $960 million and other investments amounted for $1.48 billion. The net outflow amounted to $20 million. The country's overseas investments of $330 million were offset by an increase in retrieval of overseas assets by financial institutions to downsize their offshore borrowings, which resulted in a net inflow of $10 million. Korea's capital account had been in a surplus mode in the early 1990s before recording a deficit in 1998 amid ballooning foreign debts coupled with a drop in offshore securities issuances. In 1999, the account recovered and recorded $580 million in surplus. For example, in 1996, the country's trade deficit of $26 billion was offset by a capital account surplus, a BOK official said. ``But in the middle of a trade account surplus, this capital account surplus works as pressure to appreciate Korean currency, and could put a dent to our export drive.'' |
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