Seoul - Xinhua
South Korea\'s foreign debt posted a fresh record high in the second quarter of this year as long-term external debt increased sharply amid growing foreign investment in government bonds, the central bank said Tuesday. Foreign debt reached a record 398 billion U.S. dollars as of the end of June, up 15.4 billion dollars from three months earlier, the Bank of Korea (BOK) said in a statement. The second-quarter growth was mainly attributable to a sharp rise in long-term external debt after offshore investors expanded their holdings of South Korean treasuries on views that the Asia\' s fourth-largest economy has strong fundamental and fiscal soundness. Long-term foreign debt stood at 248.2 billion dollars as of end- June, up 14.1 billion dollars from three months ago. Short-term foreign borrowing grew 1.3 billion dollars on- quarter to reach 149.7 billion dollars in the second quarter, but the growth was eased from a 13.5 billion dollar expansion tallied in the first quarter. The ratio of short-term foreign debt against foreign reserve assets came in at 49.2 percent as of the end of June, down 0.5 percentage point from three months earlier. Short-term external debt accounted for 37.6 percent of the total foreign debt as of end-June, indicating the nation\'s ability to repay short-term debt improved during the April-June period. Meanwhile, the nation\'s net external credit, or external assets minus external liabilities, reached 89.5 billion dollars as of the end of June, up 3.2 billion dollars from the previous quarter.