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External Debt, Q3 2020

  • DivisionInternational Finance Bureau - International Finance Division
  • DateNovember 20, 2020
  • Tel0442154710

External Debt, Q3 2020

 

External Debt Amounts to US $511.0 Billion,

Soundness Indicators Improving

 

 

Korea’s external debt amounted to US $511.0 billion as of the end of September 2020, rising US $7.9 billion from the previous quarter.

 

- Short-term debt: US $144.1 billion, down US $10.2 billion quarter-on-quarter

- Long-term debt: US $366.9 billion, up US $18.1 billion quarter-on-quarter

 

External Debt, Q3 2020

(US $billion)

 

2008

2010

2015

2018

2019

2020

Change

(q-o-q)

Mar

Jun

Sep

Total debt

-Short-term

-Long-term

314.1

146.8

167.2

354.7

135.0

219.7

396.1

104.3

291.7

441.2

125.6

315.6

467.0

134.5

332.5

485.8

148.5

337.3

503.1

154.3

348.8

511.0

144.1

366.9

7.9

-10.2

18.1

* Source: International Investment Position (IIP) at the end of September 2020 (preliminary, Bank of Korea, November 19, 2020)

 

External debt increased from the previous quarter due to rising foreign investment in Korea treasuries and other government debt, as well as growing issuance of long-term foreign bonds.

 

Government borrowings (up US $7.8 billion) went up as foreign investment in government debt rose, in particular long-term bonds. Central bank borrowings (down US $12.5 billion) fell due to the repayment of dollar funds that flowed in through the Korea-US swap line the previous quarter.  Borrowings by banks (up US $6.6 billion) grew as foreign bank branches in Korea increased borrowings (up US $4.1 billion) to pay back Korea-US swap line funds, as well as due to rising long term debt issuance (US $2.7 billion).  Borrowings by the other sector (up US $6.0 billion) rose due to an increase in long-term corporate bonds issued in foreign currencies. 

 

Soundness

 

External debt soundness indicators improved as the ratio of short-term external debt to total external debt went down 2.5 percentage points to 28.2 percent and the ratio of short-term external debt to foreign exchange reserves fell 3.3 percentage points to 34.3 percent.

 

Solvency

 

Net foreign assets in debt instruments (total external assets in debt instrumentstotal external debt) stood at US $461.4 billion, up US $11.6 billion from the previous quarter.

 

 

Short-term External Debt and External Assets in Debt Instruments

 

(%, %p, US $billion)

 

2008

2010

2015

2018

2019

2020

Change

(q-o-q)

Mar

Jun

Sep

Ratio of Short-term Debt to Total External Debt

46.8

38.0

26.3

28.5

28.8

30.6

30.7

28.2

-2.5¹

Ratio of Short-term Debt to Foreign Exchange Reserves

73.0

46.3

28.3

31.1

32.6

37.1

37.6

34.3

-3.3¹

External Assets in Debt Instruments

340.6

450.6

720.5

918.8

947.6

950.0

952.8

972.4

19.5

Net External Assets in Debt Instruments

26.5

95.9

324.5

477.6

480.6

464.2

449.8

461.4

11.6

1. %p

 

The government will closely monitor the external debt situation and strengthen its risk management as there are pandemic-related uncertainties in the global financial market, as well as uncertainties over a no-deal Brexit.

 

Please refer to the attached pdf

 

 

Ministry of Economy and Finance
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