S. Korea’s short-term foreign debt drops the most in 11 years

2022.11.24 11:07:01 | 2023.04.28 13:38:03

[Photo by MK DB]이미지 확대

[Photo by MK DB]

South Korea’s short-term foreign debt fell by the most in 11 years amid a sluggish global stock market and a strong U.S. dollar, helping to boost the country’s net external financial assets to hit a record.

The ratio of short-term foreign debt to foreign exchange reserves was 41 percent at the end of the third quarter ended September, remaining in the 40 percent level for two straight quarters after it topped 40 percent for the first time in the second quarter since the third quarter of 2012 with 41.5 percent.

But the ratio lost 0.9 percentage point from the previous quarter, marking its first retreat since the fourth quarter of last year.

“Overall, things have improved from the second quarter and it’s not bad in terms of external debt soundness,” a Bank of Korea official said.

As of the end of the third quarter, external financial assets totaled $2.08 trillion, down $40.6 billion from the previous quarter. Overseas stock investment dropped $35.2 billion to $707.1 billion due to the decline in global stock prices, extending the losing streak for three straight quarters since the fourth quarter of last year.

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