South Korea's foreign debts grow to $418.6 bn

Seoul: South Korea's foreign debts grew to USD418.6 billion in the second quarter of this year as lenders increased their short-term borrowing from overseas, the central bank said Tuesday.

Foreign currency debts reached USD418.6 billion as of June-end, up USD6.1 billion from three months earlier, according to the Bank of Korea (BOK).

Short-term foreign debts that mature in one year or less expanded USD5.6 billion on-quarter to USD141.4 billion in the three months ending June 30 as local lenders increased their short-term borrowing, reported Xinhua citing the central bank.

Long-term external liabilities inched up USD0.5 billion on-quarter to USD277.2 billion in the second quarter due to a rise in foreign investment into monetary stabilization bonds (MSB) and corporate bonds that offset a fall in investment into government bonds by foreigners.

The nation's foreign debt soundness worsened more or less due to growth in short-term debts.

The ratio of short-term foreign debts to foreign reserves advanced 2.3 percentage points on- quarter to 45.3 percent as of the end of June, while the rate of short-term external debts to the total foreign debts rose 0.9 percentage point to 33.8 percent.

The capability to service foreign debts was also aggravated. The country's external credit decreased USD2.4 billion on- quarter to USD506.7 billion in the second quarter, sending the net external credit, or external assets minus external liabilities, to USD88.1 billion as of end-June, down USD8.4 billion from three months before.


IANS