The Short-Term External Debt Ratio, Which Increased Due to COVID-19, Falls by 3.3%P to 34.3%

[Asia Economy Reporter Kim Eunbyeol] The ratio and proportion of short-term external debt, which had increased due to the novel coronavirus infection (COVID-19) crisis, have significantly decreased. This is interpreted as a sign that, as market conditions have somewhat stabilized, there is an increasing tendency to secure funds more stably rather than borrowing money urgently.

According to the 'International Investment Position (Provisional)' released by the Bank of Korea on the 19th, as of the end of September, South Korea's short-term external debt ratio relative to reserve assets was 34.3%, down 3.3 percentage points compared to the previous quarter. The proportion of short-term external debt in total external liabilities also fell by 2.5 percentage points to 28.2% compared to the previous quarter.

The short-term external debt decreased as funds from the Korea-US currency swap were repaid. Short-term external debt, which was around $154.3 billion at the end of June, decreased to $144.1 billion by the end of September.

Net external financial assets recorded $553.1 billion, down $100 million from the previous quarter. External financial assets increased by $66 billion from the end of the previous quarter to $1.8062 trillion due to an increase in residents' securities investment balances, while external financial liabilities rose by $66.2 billion to $1.253 trillion due to an increase in non-residents' securities investment balances. The increase in both external financial assets and liabilities was mainly influenced by non-transaction factors such as rising domestic and international stock prices and the value of the Korean won.

As of the end of September, net external claims (external claims minus external liabilities) increased by $11.6 billion from the end of the previous quarter to $461.4 billion. External claims rose by $19.5 billion to $972.4 billion, and external liabilities increased by $7.9 billion to $511 billion.

External claims increased due to growth in reserve assets, direct investment (debt instruments), and trade credits, while external liabilities were affected by foreign investment in domestic bonds and an increase in residents' overseas securities issuance.

This content was produced with the assistance of AI translation services.