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Seoul, Nov 20 (IANS) South Korea's foreign debts grew to $419.4 billion in the third quarter as local lenders increased external liabilities with a long−term maturity, data by the central bank showed Tuesday. The country's foreign debts totaled $419.4 billion as of the end of September, up 3.6 billion dollars from three months earlier, according to the Bank of Korea (BOK). Short−term debts that mature in one year or less contracted $8.1 billion to $132.6 billion over the cited period as domestic banks and local branches of foreign banks repaid foreign debts with a short maturity. Long−term liabilities with a maturity of more than one year reached $286.7 billion as of end−September, up $11.7 billion from three months before. The reduction in short−term debts came with an increase in longer−term liabilities, indicating that the country's foreign debt structure was improved in the third quarter, the BOK noted. The ratio of short−term debts to foreign reserves came in at 41.2 percent as of the end of September, the lowest since the first quarter of 2006 when it recorded 34.6 percent. The figure was down 3.9 percentage points from three months before. The ratio of short−term liabilities to the total foreign debts stood at 31.6 percent as of end−September, the lowest since the fourth quarter of 1999 when it registered 29.7 percent. The reading was low compared with advanced nations such as the US with 33 percent as of end−June, Japan with 78.8 percent, Germany with 36 percent and France with 35.2 percent. The finance ministry, however, cautioned that the lower percentage of short−term foreign debts would indicate the weak demand for trade financing amid the worsening global economic outlook.
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