Q3 Short-term External Debt Ratio at 21.8%... Lowest Level Since Statistical Compilation

Foreign debt in the third quarter of this year decreased by nearly $16 billion compared to the previous quarter.

The Ministry of Economy and Finance announced on the 22nd that as of the end of the third quarter of this year, foreign debt stood at $649.3 billion, down $15.7 billion from the end of the previous quarter ($665.1 billion).

Short-term external debt (maturity within one year) was $141.6 billion, a decrease of $20.3 billion compared to the previous quarter, while long-term external debt (maturity over one year) increased by $4.6 billion to $507.7 billion during the same period. By sector, foreign debt decreased in the government (-$2.2 billion), central bank (-$4.2 billion), and banks (-$11.9 billion), while foreign debt in other sectors (non-bank, public, and private enterprises) increased by $2.7 billion.

As of the third quarter this year, foreign claims amounted to $1.002 trillion, decreasing by 1.7% (-$16.9 billion) from the end of the previous quarter ($1.089 trillion) due to factors such as a $7.3 billion decline in foreign exchange reserves. Net foreign claims, which is the difference between foreign claims and foreign debt, stood at $352.7 billion, down 0.3% (-$1.1 billion) from the previous quarter ($353.8 billion).

On the 14th, an employee is organizing dollars at the Hana Bank Counterfeit Response Center in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

During this period, the proportion of short-term external debt (short-term external debt/total external debt) fell by 2.5 percentage points to 21.8% from 24.3% in the previous quarter, and the ratio of short-term external debt to reserves dropped by 4.2 percentage points to 34.2%, indicating an improvement in external debt soundness indicators.

The short-term external debt to total external debt ratio is at its lowest level since statistics began to be compiled, and the short-term external debt to reserves ratio is the lowest since the fourth quarter of 2019, just before the COVID-19 pandemic. The foreign currency liquidity coverage ratio (LCR), which indicates the repayment ability of domestic banks' foreign debt, stood at 143.3% as of the end of September this year, significantly exceeding the regulatory threshold of 80%.

The Ministry of Economy and Finance stated, "However, given the prolonged global high interest rates and geopolitical risks such as the Middle East crisis, which have heightened uncertainty in international financial markets, we will closely monitor foreign debt trends through close cooperation among relevant agencies going forward."

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