[THE INVESTOR] South Korea’s ratio of short-term foreign debt to foreign exchange reserves rose in the second quarter, data showed on Aug. 30.

The country’s short-term external debt, with a maturity of one year or less, totaled US$106.8 billion as of the end of June, up $2.7 billion from three months earlier, according to the data by the Bank of Korea.

The end-June figure accounted for 27.3 percent of the country’s total external debt, up 0.5 percentage point from the previous quarter, the data showed.

The nation’s total external liability reached $391.8 billion at the end of June, up $2.5 billion over the cited period.

The ratio of short-term foreign debt to its forex reserves stood at 28.9 percent at the end of June, up from 28.1 percent at the end of March. The March figure marked the lowest since the fourth quarter of 2004, when the comparable figure was 27.3 percent.

South Korea’s short-term foreign debt, which refers to external debt with a maturity of less than one year, was an area of concern during past financial turmoil as a sharp rise in foreign debt left lenders vulnerable to external shocks.

The ratio had sharply surged during the global financial crisis, hitting 79.3 percent in the third quarter of 2008.


(theinvestor@heraldcorp.com)