It has been found that Korea’s overseas investment increased based on a current account surplus while investment in Korea by foreigners decreased last year. Under the circumstances, Korea maintained a positive net international investment position for the second consecutive year. At the same time, its foreign exchange reserves showed a slight increase and its external liabilities showed a decline.
The Bank of Korea announced on February 25 that Korea posted a foreign investment balance of US$941.1 billion as of the end of last year, US$53.3 billion less than a year ago. Approximately US$39.4 billion left the domestic stock market and foreign direct investment declined by about US$5.5 billion.
The other types of investment including trade credit showed a decrease of US$10.4 billion as exports declined. The central bank explained that non-transactional factors such as the depreciation of the Korean currency and drop in stock price exerted more influence than disinvestment by foreign investors.
Last year, Korea’s total external liabilities fell by US$27.8 billion to US$396.6 billion. Those with a maturity of less than one year decreased by US$7.7 billion to US$108.7 billion to reach the lowest level since 2005. The ratio of the short-term liabilities to the foreign exchange reserves fell 2.5 percentage points to 29.6%, the lowest since 2004, as well. Likewise, the ratio of the short-term liabilities to the total liabilities almost halved compared to the all-time high of 51.6% that was recorded 10 years ago.