S. Korea's chip and bio exports drive highest current account surplus; BOK chief and deputy PM meet

South Korea has posted its largest monthly current account surplus on record thanks to chips, pharmaceuticals, and dividend income.

The news also came as the Deputy Prime Minister for Economy and Finance visited the BOK for the first time.

Our Kim Do-yeon reports.

South Korea posted a current account surplus of 14-point-27 billion U.S. dollars in June — the country's largest monthly surplus on record.

According to the Bank of Korea on Thursday, the figure was fueled by strong semiconductor exports and a surge in dividend income.

June also marked a surplus for the 26th consecutive month.

Compared to May, the goods account surplus alone rose by 2-point-5 billion dollars, helping push the first-half total to 49-point-37 billion dollars — the third highest H1 figure in history.

"This is the result of a sharp increase in the primary income account, driven mainly by dividend income, on top of a wider goods surplus due to a drop in commodity imports following lower oil prices."

In June, exports of semi-coductors rose over 11 percent, while pharmaceutical shipments soared more than 50 percent.

Much of the chip sales appear to have been front-loaded ahead of the U.S. tariffs taking effect.

However, steel and automobile exports slipped, reflecting early pressure from the new tariff regime.

Regionally, exports to the U.S. and China declined, while shipments to the EU and Southeast Asia posted solid gains.

Despite concerns for other items due to tariffs, the Bank of Korea maintained a positive outlook for the current account in the near term.

"As for semiconductors and pharmaceuticals, South Korea secured the most favorable terms under the agreement, so we're not likely to face disadvantages compared to other countries, nor see a significant drop in the competitiveness of our chip industry."

The news also came as the Deputy Prime Minister for Economy and Finance Koo Yun-cheol visited the Governor of the Bank of Korea Lee Chang-yong for the first time.

Greeting the Deputy Prime Minister the General touted the government's tariff deal with the U.S saying it eased the burden for the central bank as well.

"To be honest, from both my personal view and the Bank of Korea's perspective, the recent tariff agreement was handled well — and it has significantly eased the pressure going into our monetary policy meeting at the end of August."

The deputy prime minister also said the decline in potential growth rate is due to a loss in the country's economic capability, adding, "All economic players must work together to strengthen that capability."

Kim Do-yeon, Arirang News.