External Debts
According to the Bank of Korea’s provisional International Investment Position (IIP) released on June 1, Korea recorded a balance of external debt of US$418.9 billion at the end of March this year, US$6.5 billion less than at the end of 2014. Short-term debts accounted for US$112.8 billion, with its ratio to the total declining by 0.2 percentage points to 26.9 percent.
The ratio of short-term liabilities amounted to 51.9 percent in September 2008, but has remained below 30 percent since 2013. Likewise, the ratio of short-term liabilities to foreign exchange reserves decreased from 31.7 percent to 31.1 percent, the lowest since the financial crisis of 2008 between the end of 2014 and the end of the first quarter of 2015.
The foreign credit balance increased by US$2.8 billion during the same period to reach US$681.8 billion, while the overseas investment balance and the balance of investment by foreigners went up by US$23.9 billion and US$25.3 billion to US$1.0141 trillion and US$1.0236 trillion, respectively. The central bank explained that non-transactional factors such as a rise in domestic stock prices led to a US$21.2 billion increase in the securities investment balance, which, in turn, resulted in increasing foreign investment. The net IIP, which is calculated by subtracting foreign investment from overseas investment, was at US$80.5 billion to record a US$1.4 billion decline.