External debt rises over 10% in 2011Korea’s external debt rose in 2011 from the previous year, as financial institutions raised foreign currency-denominated debts on euro-area concerns, the central bank said yesterday.
The country’s external debt amounted to $398.4 billion as of the end of December, up $39 billion from one year ago, according to a preliminary report by the Bank of Korea (BOK).
This is the highest amount since the end of June 2011, when the outstanding external debt hit $399.2 billion.
In 2011, Korea saw its long-term external debt increase by $42.6 billion from a year ago, compared to a decline of $3.6 billion in its short-term overseas debt, according to the BOK.
Asia’s fourth-largest economy held $262.2 billion in long-term external debt, which has a maturity of more than one year. Its short-term debt totaled $136.1 billion.
Financial institutions sought to secure foreign currency liquidity by resorting to overseas borrowing and floating foreign currency-denominated bonds, according to the bank.
“More than half of the increase in long-term external debt came from banks,” said a BOK economist. “Banks tried to secure foreign currency assets for rainy days.”
Overseas borrowing by financial institutions stood at $194.1 billion as of the end of December, up $21 billion from a year earlier. Yonhap
More in Economy
Gangbuk beats Gangnam
600,000 jobs added last year, but many public or welfare
Consumer price gains pick up speed in November
Life expectancy up 7 months for Koreans born in 2019
OECD knocks tenth of a point off Korea's 2020 growth