Q2 External Debt at $658.3 Billion... Decrease of $9.2 Billion

Ministry of Economy and Finance, Q2 External Claims and Liabilities Trends

Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, is attending the Economic Ministers' Meeting held at the Government Seoul Office in Jongno, Seoul on the 21st, speaking about recent economic issues such as the Wemakeprice and Tmon incidents and the fuel tax. Photo by Jo Yong-jun jun21@

In the second quarter of this year, South Korea's external debt stood at $658.3 billion, a decrease of $9.2 billion compared to $667.5 billion at the end of the previous quarter.

According to the "2nd Quarter External Claims and Debt Trends" released by the Ministry of Economy and Finance on the 21st, short-term external debt with a maturity of less than one year was $142 billion, an increase of $0.9 billion from the end of the previous quarter, while long-term external debt (maturity over one year) was $516.3 billion, a decrease of $10.1 billion.

Specifically, the government and the central bank each decreased by $5.1 billion and $1.1 billion respectively, and other sectors including banks, non-bank sectors, public, and private enterprises decreased by $2.3 billion and $0.7 billion respectively, showing a decline across all sectors.

External claims amounted to $1.0397 trillion, down $12.3 billion (1.2%) from $1.0521 trillion at the end of the previous quarter. Net external claims, calculated as external claims minus external debt, were $381.5 billion, a decrease of $3.1 billion (0.8%) from $384.6 billion at the end of the previous quarter.

The proportion of short-term external debt to total external debt was 21.6%, down 3.0 percentage points from 24.6% a year ago, and the ratio of short-term external debt to foreign exchange reserves was 34.4%, continuing the overall downward trend since the second quarter of last year (39.4%).

The foreign currency liquidity coverage ratio (LCR), which indicates the repayment ability of domestic banks' foreign debt, stood at 145.0% at the end of the second quarter, significantly exceeding the regulatory ratio of 80%.

An official from the Ministry of Economy and Finance stated, "Amid ongoing uncertainties regarding major countries' monetary policies, geopolitical issues such as instability in the Middle East, and the U.S. presidential election, which could still increase volatility in international financial markets, we will closely monitor external debt trends based on close cooperation among related agencies."

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