SEOUL– South Korea’s external debt declined in the third quarter of this year after hitting an all-time high in the previous quarter amid worries over mounting economic uncertainty, central bank data showed Wednesday.
The country’s external liabilities had come to US$639.0 billion as of end-September, compared with $662.0 tallied three months earlier, according to the preliminary data from the Bank of Korea (BOK).
The decline stemmed from a reduction in short-term external borrowing by local banks and a decline in long-term debt of the government and the central bank.
Of the total, the country’s short-term debt that matures in a year shrank $12.9 billion on-quarter to $170.9 billion, while the long-term debt also contracted $10.1 billion over the same period to $468 billion, the data showed.
The ratio of short-term debt to foreign reserves inched down from 41.9 percent to 41 percent. A lower ratio means stronger debt-serving capability.
The ratio of short-term debt to total external liabilities also fell 1 percentage point on-quarter to 26.8 percent, the data showed.
Meanwhile, the country’s total external assets shrank $29.6 billion on-quarter to $1.02 trillion. Its net external assets — assets minus liabilities — totaled $379.6 billion as of end-September, down $6.5 billion from three months earlier, according to the data.
Source: Yonhap News Agency