Korea’s external debt amounted to $663.6 billion as of the end of 2023, falling by $1.6 billion from a year ago, marking the first decrease in seven years since 2016. By maturity, short-term external debt (maturities of one year or less) decreased by $30.3 billion to $136.2 billion compared to that of the end of last year. Long-term external debt (maturities greater than one year) increased by $28.7 billion to $527.4 billion from a year ago. By sector, external debt of the central bank (down $3.4 billion) and banks (down $26.2 billion) fell while that of the government (up $15.1 billion) and other sectors including non-bank financial institutions, and public and private companies (up $12.9 billion) rose.
Meanwhile, external bonds as of the end of 2023 amounted to $1.0278 trillion, up by $6.1 billion or 0.6% from the end of the previous year ($ 1.0217 trillion).
As a result, net external bonds (external bonds minus external debt) also climbed up by $7.7 billion or 2.2% to $364.2 billion compared with that of the end of last year ($356.5 billion).
The decrease in the short-term external debt led to an improvement in key indicators of external debt solvency; the ratio of short-term external debt to total external debt dropped from 25.0% at the end of 2022 to 20.5% at the end of 2023 and the ratio of short-term external debt to total reserves decreased from 39.3% at the end of 2022 to 32.4% at the end of 2023. The ratio of short-term external debt to total external debt is at its lowest level since statistical aggregation began while the ratio of short-term external debt to total reserves hit its lowest level since 2018. The foreign currency liquidity coverage ratio (LCR), which indicates domestic banks’ ability to repay external debt, stood at 154.4% as of the end of 2023, significantly exceeding the regulatory requirement of 80%.
However, under the high uncertainties in the global financial markets due to factors such as persistently high inflation, a possible delay in monetary policy shifts, and credit risks of the sectors that are vulnerable to high-interest rates such as commercial real estate loans in the Unite d States, the government will continue to meticulously monitor the status of external debt in collaboration with relevant institutions.
Please refer to the attached files.
