S. Korea`s foreign debt falls in Q1

SEOUL, May 21 (Yonhap) -- South Korea's foreign debt declined in the first
quarter as local banks repaid overseas borrowing amid easing global financial
turmoil, the central bank said Thursday.
The country's foreign debt stood at US$369.3 billion as of the end of March, down
3.1 percent from three months earlier and marking the second consecutive quarter
of fall, according to the Bank of Korea (BOK).
In the fourth quarter, Korea's overseas debt declined by a record $45 billion as
lenders repaid short-term borrowing by tapping foreign currency liquidity
provided by authorities, it added.
"The country's overseas debt fell last quarter as the current account swung to
the black and local banks paid back overseas borrowing," an official at the BOK
said.
The banking sector's foreign debt stood at $161.9 billion as of the end of March,
down $9.79 billion from the previous quarter, it said.
The data comes as local banks, saddled with high overseas short-term borrowing,
had been suffering from dollar shortages in the wake of the collapse of Lehman
Brothers Holdings Inc., sparking concerns they may face difficulty in meeting
financial needs and servicing their debt.
But as the country's trade surplus is rising and local banks are making efforts
to borrow overseas, foreign currency liquidity conditions are improving, making
it easier for local banks to rollover their overseas borrowing.
South Korea's net external debt reached $23.9 billion as of end-March, down from
a net debt of $32.6 billion the previous quarter, the BOK added.
South Korea's growing foreign debt, coupled with a deficit in its current
account, led the country to become a net debtor for the first time in eight years
in the third quarter of 2008.
sooyeon@yna.co.kr
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