South Korea's foreign debts grew to $418.6 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 $418.6 billion as of June-end, up $6.1 billion from three months earlier, according to the Bank of Korea (BOK).
Short-term foreign debts that mature in one year or less expanded $5.6 billion on-quarter to $141.4 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 $0.5 billion on-quarter to $277.2 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 $2.4 billion on- quarter to $506.7 billion in the second quarter, sending the net external credit, or external assets minus external liabilities, to $88.1 billion as of end-June, down $8.4 billion from three months before.