SEOUL: The ratio of South Korea’s short-term external debt to its foreign exchange reserves reached the highest in nearly two years at the end of June, central bank data showed on Thursday, leaving the economy slightly more vulnerable to financial shocks. The ratio at end-June ticked up to 30.8 percent versus 30.7 percent at end-March and was the highest since 31.3 percent seen at the end of September in 2015, the Bank of Korea said.
South Korea’s short-term external debt rose to $117.3 billion at the end of June from $115.4 billion at end-March. Second-quarter external short-term debt was at the highest the level since the June quarter of 2015. The total external debt owed by South Korea inched up to $407.3 billion in the second quarter, the central bank said, from $405.7 billion as of end-March. The finance ministry said in a separate statement that the increase in total external debt was due to offshore demand for South Korean bonds.
