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South Korea's short-term foreign debt declined to its lowest level in seven years in the third quarter on a fall in banks' overseas borrowing, the central bank said Wednesday.
The country's short-term external debt totaled US$111.5 billion as of end-September, down $8.1 billion from three months earlier, according to the Bank of Korea (BOK).
It marked the lowest level since the third quarter of 2006 when short-term foreign debts hit $107.4 billion.
The third-quarter data also marked the fifth straight quarter of falls, indicating that the structure of the country's foreign debt has improved.
Korea's total external debt amounted to $411 billion as of end-September, up $3.7 billion from three months earlier as foreign investors bought longer-dated state and central bank bonds.
"Korea's capacity to repay foreign debt has improved amid the underlying trend of the current account surplus," Kim Young-hun, the head of the BOK's international investment position team, told reporters.
South Korea has differentiated itself from other emerging countries that have been struggling to tackle massive foreign capital outflows and currency weakness.
The falling trend of the short-term external debt helped improve Korea's capacity to service its foreign debt, the BOK said.
The rate of the short-term debt against the country's total debt reached 27.1 percent as of end-September, the lowest since 27 percent in the second quarter of 1999.
In comparison, the ratio of the short-term debt to the external debt for the U.S. stood at 33.1 percent, and the corresponding rate for Japan reached 75.7 percent as of end-June, according to the latest figures available.
The ratio of the short-term debt against the foreign reserves came in at 33.1 percent, the lowest since 31.3 percent in the fourth quarter of 2005.
Korea's high short-term foreign debt used to be a major headache whenever a financial crisis occurred as a surge in foreign debt left local banks vulnerable to external shocks.
South Korea's net external credit reached $171 billion as of end-September, up $23.8 billion from the preceding quarter, it said. (Yonhap News)
The country's short-term external debt totaled US$111.5 billion as of end-September, down $8.1 billion from three months earlier, according to the Bank of Korea (BOK).
It marked the lowest level since the third quarter of 2006 when short-term foreign debts hit $107.4 billion.
The third-quarter data also marked the fifth straight quarter of falls, indicating that the structure of the country's foreign debt has improved.
Korea's total external debt amounted to $411 billion as of end-September, up $3.7 billion from three months earlier as foreign investors bought longer-dated state and central bank bonds.
"Korea's capacity to repay foreign debt has improved amid the underlying trend of the current account surplus," Kim Young-hun, the head of the BOK's international investment position team, told reporters.
South Korea has differentiated itself from other emerging countries that have been struggling to tackle massive foreign capital outflows and currency weakness.
The falling trend of the short-term external debt helped improve Korea's capacity to service its foreign debt, the BOK said.
The rate of the short-term debt against the country's total debt reached 27.1 percent as of end-September, the lowest since 27 percent in the second quarter of 1999.
In comparison, the ratio of the short-term debt to the external debt for the U.S. stood at 33.1 percent, and the corresponding rate for Japan reached 75.7 percent as of end-June, according to the latest figures available.
The ratio of the short-term debt against the foreign reserves came in at 33.1 percent, the lowest since 31.3 percent in the fourth quarter of 2005.
Korea's high short-term foreign debt used to be a major headache whenever a financial crisis occurred as a surge in foreign debt left local banks vulnerable to external shocks.
South Korea's net external credit reached $171 billion as of end-September, up $23.8 billion from the preceding quarter, it said. (Yonhap News)
