South Korea's foreign debt grows to $503.1b in Q2

South Korea's foreign debt grew in the second quarter (Q2) as foreigners bought local state bonds, the finance ministry said Thursday.

The country's foreign debt amounted to 503.1 billion US dollars as of the end of June, up $17.2 billion from three months earlier, reports Xinhua citing the Ministry of Economy and Finance.

The short-term external liability, which matures in less than a year, gained $5.7 billion to $154.3 billion in the cited period as the dollar fund was supplied through the currency swap deal between central banks of South Korea and the United States.

The long-term foreign debt with a maturity of at least one year expanded $11.5 billion to $348.8 billion as foreign investors raised investment in domestic government and public bonds.

Despite the debt increase, the foreign liability soundness remains solid. The ratio of short-term foreign debt to the total external liability stood at 30.7 per cent as of end-June, up 0.1 percentage point from three months earlier.

It was much lower than 51.7 per cent tallied at the end of September in 2008 when the global financial crisis roiled the financial market.

Net external credit, or investment in overseas financial assets minus foreign debt, amounted to 553.2 billion as of the end of June, down 12.2 billion from three months earlier.