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Korea’s External Debt decreases to US $663.6 billion in 2023
Apr 2024
Korea’s external debt fell by $1.6 billion from the previous year to $663.6 billion as of the end of 2023, 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, and 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 and banks fell by $3.4 billion and $26.2 billion respectively. The debt of the government and other sectors including  non-bank financial institutions and public and private companies rose by $15.1 billion and $12.9 billion respectively. 

Meanwhile, external bonds totaled $1.0278 trillion at the end of 2023, up by $6.1 billion or 0.6% from the previous year’s amount of $ 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 from the previous year’s amount of $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%.