S. Korea's foreign debts hit record high in Q3

SEOUL, Nov. 28 (Yonhap) -- South Korea's overseas debts reached a record high in the third quarter of the year as local banks and companies increased borrowing, the central bank said Friday.

Foreign debts reached US$425.1 billion at the end of September, compared with
$420.6 billion three months earlier, according to the Bank of Korea (BOK).
Short-term debt with a maturity of one year or less stood at $189.4 billion, up
$12.9 billion over the cited period, accounting for 44.6 percent of total foreign
debts. Long-term debt fell by $8.5 billion to $235.7 billion, it said.
Borrowing by Korean banks and the local branches of foreign lenders surged by
$10.3 billion to $221.9 billion, while that by individuals and local companies
rose by $4.36 billion to $150.3 billion, the central bank said.
The spike in foreign borrowing was partially the result of banks' handling of
dollar forwards that were sold by local shipbuilders and asset managers looking
to hedge their risks in overseas stock investments.
South Korea's growing foreign debt, coupled with a widening deficit of the
country's current account, led the it to become a net debtor country for the
first time in eight years, according to the central bank.
Credit owned by South Korea reached $399.9 billion as of end-September, down from
$422.3 billion three months earlier, it added.
The BOK said in June that the growth rate of the country's external debt is
expected to slow sharply in the second half of the year as local shipbuilders'
overseas orders will likely to grow at a slower pace.
sam@yna.co.kr
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