Foreign currency borrowing by South Korean companies posted a double-digit fall last year due to the weakening of the Japanese yen and delayed economic recovery, financial watchdog data showed on Wednesday.
Foreign currency debts owed by local residents to banks reached 19.76 billion U.S. dollars as of end-2015, down 12.3 percent from the previous year, according to the Financial Supervisory Service (FSS).
Companies' foreign currency borrowing continued to reduce from 2010 when the government tightened standards for foreign debts borrowing in order to lessen foreign exchange market's volatility. In 2015, corporate demand for foreign debts reduced further as companies repaid the Japanese yen-denominated debts amid the weaker yen trend.
Yen-denominated debts extended by banks plunged 36.8 percent from a year earlier to 3.14 billion dollars at the end of 2015. The U.S. dollar debts declined 5.4 percent to 16.31 billion dollars in the cited period as companies refrained from borrowing foreign currency debts amid the lackluster economic conditions.
Debts for large corporations reduced 7.3 percent from a year earlier to 12.59 billion dollars as of end-2015, with those for small firms sliding 20 percent to 7.17 billion dollars.
Amidst the continued economic recovery, demand for foreign debts to spend on facility investment posted a sharp downward trend, with falls of 37.6 percent in 2013, 32.6 percent in 2014 and 31 percent in 2015 respectively.
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