The 1st Time in 8 Quarters
The Bank of Korea announced on May 25 that South Korea’s net international investment position (IIP) increased by US$36.4 billion to US$696 billion in the fourth quarter of last year, when the IIP increased US$10.9 billion to US$2.1893 trillion.
In that quarter, overseas securities investment decreased for the first time in eight quarters. According to the bank, this is because global stock indices fell along with the values of major currencies in relation to the U.S. dollar.
External financial liabilities, in the meantime, decreased US$25.5 billion to US$1.4933 trillion in the first quarter of this year. In that period, foreigners increased their bond investment in South Korea but their stock investment in the country decreased along with the domestic stock indices and the value of the won vis-à-vis the U.S. dollar.
In Q1, external receivables and liabilities were US$1.0798 trillion and US$654.1 billion, respectively. The net external receivables decreased US$22.2 billion to US$425.7 billion, the lowest since the second quarter of 2017. The ratio of short-term liabilities to reserve assets, a financial soundness indicator, increased 2.6 percentage points to 38.2 percent. Likewise, the ratio of short-term liabilities to external liabilities increased 0.7 percentage point to 26.7 percent.