South Korea's net external financial assets in the second quarter of 2023 hit a record low due to an increase in the valuation of foreign-owned domestic stocks following a rise in domestic stock prices. Although external financial assets exceeded $3 trillion for the first time, external financial liabilities also increased significantly, resulting in a decrease in net external financial assets to $64 billion. However, the Bank of Korea explained that the cause was the rise in domestic stock prices and that residents' overseas asset size continues to increase, assessing the external payment capacity as sound. In addition, net external claims increased for the first time in three quarters, and the ratio of short-term foreign debt to reserve assets also rose. The government also evaluated the external payment capacity as sound, considering the increase in foreign exchange reserves, and promised efforts to maintain external soundness amid changes in international conditions.
