Net external debt by gov't, state firms hits record high in Q3

SEOUL, Dec. 2 (Yonhap) -- The net external debt held by the South Korean
government and state-run firms hit a record high as of September on the rise of
foreign buying of state bonds and overseas debt sales of public corporations,
data by the central bank showed Wednesday.
The government and state firms owed a combined US$28.97 billion more than the
value of their assets held overseas as of the end of September, compared with a
net external debt of $13.7 billion the previous year, according to the Bank of
Korea (BOK). It marked the largest gap since 1994 when the BOK began to compile
related data.
Foreign debt by the government rose 5.5 percent on-year to $25.4 billion in the
third quarter. Local state firms' overseas debt reached $13.4 billion as of
end-September, up 52.6 percent from a year ago and marking the fastest increase
since a 68.6 percent gain in the first quarter of 1998, the BOK said.
The central bank said a sharp gain in their net external debt came as foreign
investors bought a large amount of South Korean treasuries and state companies
increased bond issuances overseas.
The government has increased debt sales this year to finance economic stimulus
packages and since June, South Korean state-run companies have issued more
overseas bonds to raise foreign currency funds amid the easing of the global
financial meltdown.
According to the Financial Supervisory Service, foreign investors have snapped up
a net 48.4 trillion won ($41.9 billion) worth of local bonds traded in the
exchange so far this year, far exceeding net buying of 22.3 trillion won
registered in 2008.
Although foreign borrowing by the government and such companies rose in the third
quarter, foreign exchange authorities held more assets than liabilities and banks
saw their overseas debt fall by 27 percent in the cited period.
South Korea became a net creditor country in the third quarter, the first time
since the second quarter of 2008, as the country's foreign exchange reserves
increased amid the current account surplus.
sooyeon@yna.co.kr