South Korea has recorded its largest trade surplus in 21 months, as its exports rose last month - snapping three months of declines - after a weaker won fuelled overseas sales even as China's growth slowed and Europe's debt crisis deepened.

Exports last month rose 1.3 per cent from a year ago to reach US$47.4 billion (S$60 billion). Imports fell sharply by 5.4 per cent to US$42.4 billion.

That resulted in a trade surplus of US$4.96 billion last month - the biggest since US$6.34 billion posted in October 2010, the Ministry of Knowledge Economy said in a statement yesterday.

South Korea announced 8.5 trillion won (S$9.4 billion) of economic support measures last Thursday and cut its growth outlook, citing Europe's "long-term threat" to the nation's expansion. The Bank of Korea kept borrowing costs unchanged for a 12th month in June and the ministry yesterday cut its estimate for export growth this year.

"South Korean exporters are coping with the European crisis with a weaker currency and by diversifying their products and markets," Mr Kong Dong Rak, a fixed-income analyst at Taurus Investment & Securities in Seoul, said before the release.

The won has fallen about 6 per cent over the past 12 months. It strengthened 0.8 per cent to a seven-week high of 1,145.40 per US dollar on June 29, according to data compiled by Bloomberg, as European leaders made progress in aiding the region's indebted countries. The Kospi stock index rose 1.9 per cent.

Samsung Electronics, the world's largest handset maker, said last Monday that the Galaxy S III will help mobile earnings surpass the first-quarter record, after users responded more positively to the latest smartphone model. The company's mobile unit posted a record first-quarter profit of 4.3 trillion won.

TODAY