South Korea’s Short-Term Overseas Debt Rises to $136.3 Billion

South Korea’s short-term overseas debt rose in the first quarter as foreign investors purchased Korean bonds amid Europe’s worsening sovereign-debt crisis.

External debt maturing in one year or less gained $169 million to $136.3 billion as of the end of March from a quarter earlier, the Bank of Korea said in a statement today. Long-term external debt increased to $275.1 billion from a revised $262.2 billion in the fourth quarter.

Today’s statement from the Bank of Korea comes after the country’s currency dropped last week by the most in almost eight months amid concern a political impasse in Greece may deepen Europe’s debt crisis.

“The Bank of Korea will work closely with the government to limit the risk,” today’s central bank statement said.

The finance ministry will “preemptively” act against any external risks while closely monitoring changes in external debt and capital flows, the ministry said in a separate statement today.

To contact the reporters on this story: Cynthia Kim in Seoul at ckim170@bloomberg.net; Eunkyung Seo in Seoul at eseo3@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

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