Recovery in Seoul

Reuters reported that South Korean exports in September 2009 will probably post their best performance in almost a year and confidence among its exporters has surged to the strongest in almost six years, separate data showed today.

The figures come as optimism for a faster-than-expected recovery in Asia's fourth-largest economy emboldened the central bank to declare early this month that it would raise interest rates if needed to prevent asset price bubbles.

The Korea Customs Service forecast exports for the whole of September would fall 10.4 per cent from a year earlier to around US$33.5 billion (RM117.3 billion), the slowest annual decline since October 2008, while imports would fall 26.6 per cent to around US$29.0 billion.

As a result, the country would enjoy a trade surplus of around US$4.5 billion in September, it said in a statement.

The forecasts, based on the actual performance for the Sept 1-20 period, suggest average exports value per working day would rise to an 11-month high of US$1.40 billion in September from a revised US$1.26 billion in August, Reuters calculations showed.

Separately, the country's largest business lobby for trading firms said its survey index on exporter sentiment rose to 131.5 for the fourth quarter, the highest since the first quarter of 2004, from 108.5 in the third quarter.

A reading above 100 means most exporters expect business conditions to improve rather than worsen, the Korea International Trade Association (KITA) said in a statement.

Bank of Korea Governor Lee Seong-tae said on Sept 10 the central bank was ready to begin raising interest rates, becoming the first G20 central bank to shift to tightening, if the domestic property and mortgage boom continued.

But the government of growth-oriented President Lee Myung-bak has repeatedly said demand from advanced economies has not fully recovered and it is therefore too soon for a rate hike.

The central bank has held the 7-day repurchase agreement rate steady for the past seven months at a record-low 2.0 per cent after reductions totalling 3.25 percentage points between last October and February this year.

It next reviews the rate on Oct 9.

So, except for rumours that Australia will be raising its interest rate very soon too, what other countries will be doing it soon?

Malaysia?