- External debt amounts to US $662.0 billion in Q2 2022
Korea’s external debt amounted to US $662.0 billion as of the end of June, rising US $7.9 billion from the end of the previous quarter.
Government borrowings (down US $5.4 billion) and central bank borrowings (down US $4.2 billion) went down mainly due to foreign-owned long-term Korea Treasury bonds and monetary stabilization bonds (down US $7.0 billion) whose dollar equivalents were reduced because of a strong dollar. Borrowings by banks (up US $17.7 billion) significantly increased due to short-term foreign currency borrowings (up US $13.2 billion) caused by an increase in foreign currency loans and higher attractiveness of arbitrage transactions. Borrowings by other sectors (down US $200 million) declined.
Despite the external debt rising, external debt soundness indicators remain stable considering past trends, repayment capacity and causes of debt. The ratio of short-term external debt to total external debt increased, the ratio remained 27.8 percent, lower than the average of the past 10 years at 28.7 percent. In addition, the ratio of short-term debt to foreign exchange reserves has been on the rise this year, but the figure is still far lower than that of the global financial crisis.
The government will make continuous efforts to manage external soundness by closely monitoring the causes of external debt and trends of the external debt maturity structure.