Korea`s external debt falls for 7th straight month

The nation`s external debt continues to decrease.

According to the Ministry of Finance and Economy (MOFE) Tuesday, Korea`s external debt amounted to $131.7 billion as of the end of February, down $1.7 billion from a month earlier, continuing its seven-month decline since August last year. The February figure also marks the lowest level since the financial crisis in late 1997.

Lee Myung-Kyu, a MOFE official, attributed the fall to the fact that the nation repaid $1 billion it borrowed from the International Monetary Fund (IMF) and $300 million from foreign financial organizations ahead of schedule. The $300 million reduction in trade credit also helped low the size of the external debt, he explained.

The ministry also said that short-term debt was down $500 million to $41.8 billion at the end of February from a month earlier. As a result, short-term debt as a percentage of foreign currency reserves decreased four-tenths of a percent to 43.9 percent in February from the previous month.

Kwon Soon-Hwal shkwon@donga.com