Korea’s total foreign liabilities are US$418.6 billion as of the end of June 2012. Short-term liabilities are US$141.4 billion, accounting for 33.8 percent of the total liabilities. The ratio slightly rose quarter-on-quarter.

The total foreign debt increased US$6.1 billion in the second quarter of 2012, mainly due to rising demand for foreign capital, which pushed up banks’ foreign borrowing by US$1.9 billion. Despite large amount of KTBs (Korea Treasury Bonds) reaching maturity in June, there was a limited foreign capital outflow as the foreign capital invested in the KTBs was reinvested in KTBs and MSBs (Monetary Stabilization Bonds).

The slight increase of the short-term debt ratio was due to foreign capital parked in long-term KTBs being reinvested in short-term MSBs as the KTBs reached maturity. This may show that foreign investors recognize the country’s sovereign bonds as a safety asset.

Local banks’ foreign capital reserves have remained stable since 2011, while local branches of foreign banks registered an increase of foreign capital in both short-term and long-term funds this year.

As of the end of June 2012, foreign credit decreased, registering US$506.7 billion, as the value of external reserves fell. Net foreign credit slightly went down to US$88.1 billion.

Foreign liabilities to GDP were 35.7 percent as of the end of 2011, lower than those of advanced countries but relatively high among emerging countries. The relatively high ratio is due to the country’s heavy dependence on the international trade and great openness to the global economy.

   Analysis of Current Foreign Liabilities

* Source :
Ministry of Strategy and Finance and Korea Development Institute:
Press Release (Date: 21-08-2012) Website: http://english.mosf.go.kr/