International Investment Position

at the end of 2009 (Preliminary)

1. Korea's Investment Abroad and External Assets in Debt Instruments

□ As of the end of 2009, the outstanding amount of Korea's investment

abroad stood at 604.7 billion dollars, an increase of 109.3 billion dollars
from the end of 2008 (an increase of 27.2 billion dollars during Q4).

― This was attributable to a sharp increase in reserve assets as well as a

rise in the appraised value of overseas investment.

□ The outstanding amount of Korea's external assets in debt instruments*

stood at 417.1 billion dollars, an increase of 69.3 billion dollars from the
previous year-end (an increase of 16.8 billion dollars during Q4).

* Excluding direct investment (equity capital), equity securities and financial

derivatives

― Short-term assets in debt instruments increased by 64.8 billion dollars

and long-term assets by 4.5 billion dollars.

Korea's investment abroad (assets)

unit: billion dollars
p 1) 1)
2009 changes trade factors non-trade factors
as of the end of 2008 during during during during during during
SEPr
year Q4 year Q4 year Q4
Assets 495.4 577.6 604.7 109.3 27.2 77.9 21.5 31.4 5.6
Direct investment 97.9 107.8 115.6 17.7 7.8 10.6 5.8 7.1 2.0
Portfolio investment 75.1 98.2 102.4 27.3 4.2 -1.3 -1.8 28.6 6.0
(Equity securities) 47.9 72.1 76.9 29.0 4.8 2.6 -0.8 26.4 5.6
(Debt securities) 27.2 26.0 25.5 -1.8 -0.5 -3.9 -1.0 2.2 0.4
2) 2)
Financial derivatives 10.4 7.5 6.2 -4.1 -1.3 - - -4.1 -1.3
Other investment 110.8 109.8 110.5 -0.3 0.7 -0.4 0.9 0.1 -0.2
Reserve assets 201.2 254.2 270.0 68.8 15.7 69.1 16.6 -0.3 -0.9
External assets 347.9 400.4 417.1 69.3 16.8 67.2 17.5 2.1 -0.7
in debt instruments
Short-term 280.2 329.2 345.0 64.8 15.7 - - - -
Long-term 67.7 71.1 72.2 4.5 1.0 - - - -
Notes: 1) ․ trade factors: changes in assets/liabilities by way of economic trades of financial instruments
․ non-trade factors: changes in assets/liabilities through price changes, exchange rate changes
and other changes in volume
2) including gains realized through derivative transactions
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2. Foreign Investment in Korea and Korea's External Debt

□ As of the end of 2009, the outstanding amount of foreign investment in

Korea stood at 752.8 billion dollars, an increase of 144.3 billion dollars
from the end of 2008 (an increase of 17.5 billion dollars during Q4).

― This was because there was a shift to large-scale net inflows in foreign
portfolio investment and the appraised value of foreign portfolio
investment increased significantly in response to a rise in Korean stock
prices and appreciation of the Korean won against the US dollar during
the year.

*
□ Korea's external debt stood at 401.9 billion dollars, an increase of 24.0
billion dollars from the previous year-end (an increase of 4.5 billion
dollars during Q4).

* Excluding direct investment (equity capital), equity securities and financial

derivatives

― Short-term external debt increased by 0.1 billion dollars and long-term

external debt by 23.9 billion dollars.

o The proportion of short-term external debt stands at 37.3%, a 2.3%p

fall from the previous year-end.

<Ref> Proportion of short-term external debt of selected countries (as of the end of
September 2009) : Hong Kong SAR 73.9%, U.K. 70.6%, Japan 65.6%,
France 41.2%, U.S. 37.7%, Germany 32.6%

Foreign investment in Korea (liabilities)

unit: billion dollars, %, %p
p
2009 changes trade factors non-trade factors
as of the end of 2008 r during during during during during during
SEP
year Q4 year Q4 year Q4
Liabilities 608.5 735.3 752.8 144.3 17.5 39.7 8.4 104.6 9.0
Direct investment 94.7 107.4 110.8 16.1 3.4 1.5 1.1 14.6 2.3
Portfolio investment 251.0 373.4 390.0 139.1 16.6 49.4 8.7 89.7 7.9
(Equity securities) 124.6 224.2 236.0 111.3 11.8 25.7 4.4 85.7 7.4
(Debt securities) 126.3 149.3 154.1 27.7 4.8 23.7 4.3 4.0 0.6
1)
Financial derivatives 15.8 11.5 9.7 -6.0 -1.8 - - -6.0 -1.81)
Other investment 247.1 243.0 242.2 -4.9 -0.8 -11.2 -1.4 6.3 0.6
External debt 377.9 397.4 401.9 24.0 4.5 13.2 3.3 10.7 1.2
Short-term 149.9 147.5 150.0 0.1 2.5 - - - -
(/external debt) (%) (39.7) (37.1) (37.3) (-2.3) (0.2) - - - -
Long-term 228.1 249.9 252.0 23.9 2.1 - - - -
Note: 1) including losses realized through derivative transactions

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3. Net IIP and Net External Assets in Debt Instruments

□ As of the end of 2009, the net international investment position (assets

minus liabilities, Net IIP) stood at -148.0 billion dollars, down 35.0 billion
dollars from the end of 2008 (up 9.7 billion dollars during Q4).

Net International Investment Position

unit: billion dollars
p
2009 changes
trade factors non-trade factors
as of the end of 2008
r during during during during during during
SEP year Q4 year Q4 year Q4
Net IIP -113.1 -157.7 -148.0 -35.0 9.7 38.3 13.1 -73.2 -3.4

Assets 495.4 577.6 604.7 109.3 27.2 77.9 21.5 31.4 5.6

Liabilities 608.5 735.3 752.8 144.3 17.5 39.7 8.4 104.6 9.0

□ Net external assets in the form of debt instruments (external assets in debt
instruments - external debt) stood at 15.2 billion dollars, up 45.3 billion
dollars from the previous year-end (up 12.2 billion dollars during Q4).

― The amount of net external assets in the form of debt instruments has
increased further since shifting to a positive position at the end of
September 2009.

Net External Assets in Debt Instruments

unit: billion dollars
2009p changes
as of the end of 2008
r
SEP during year during Q4
Net external assets
-30.1 3.0 15.2 45.3 12.2
in debt instruments
External assets
347.9 400.4 417.1 69.3 16.8
in debt instruments
External debt 377.9 397.4 401.9 24.0 4.5

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(Appendix 1)

International Investment Position

unit: billion dollars

changes
as of the end of 2007 2008 SEP 2009r 2009p during trade non-trade
year factors factors
A. Assets 596.8 495.4 577.6 604.7 109.3 77.9 31.4
(Korea's investment abroad)
1. Direct investment 74.8 97.9 107.8 115.6 17.7 10.6 7.1
1.1. Equity capital &
68.1 88.4 96.6 103.5 15.1 8.1 7.0
reinvested earnings
1.2. Other capital 6.7 9.5 11.2 12.1 2.6 2.4 0.1
2. Portfolio investment 158.6 75.1 98.2 102.4 27.3 -1.3 28.6
2.1. Equity securities 104.9 47.9 72.1 76.9 29.0 2.6 26.4
2.2. Debt securities 53.7 27.2 26.0 25.5 -1.8 -3.9 2.2
3. Financial derivatives 2.3 10.4 7.5 6.2 -4.1 - -4.1
4. Other investment 98.8 110.8 109.8 110.5 -0.3 -0.4 0.1
4.1. Trade credits 15.2 14.2 16.2 15.5 1.4 0.9 0.5
4.2. Loans 35.9 45.3 44.0 45.2 -0.2 -0.6 0.4
4.3. Currency & deposits 11.1 17.6 18.7 16.8 -0.9 0.3 -1.2
4.4. Others 36.7 33.7 30.9 33.1 -0.6 -1.0 0.4
5. Reserve assets 262.2 201.2 254.2 270.0 68.8 69.1 -0.3
<External assets
420.6 347.9 400.4 417.1 69.3 67.2 2.1
in debt instruments>
Short-term 333.1 280.2 329.2 345.0 64.8 - -
Long-term 87.5 67.7 71.1 72.2 4.5 - -
B. Liabilities 826.3 608.5 735.3 752.8 144.3 39.7 104.6
(Foreign investment in Korea)
1. Direct investment 122.0 94.7 107.4 110.8 16.1 1.5 14.6
1.1. Equity capital &
118.2 90.2 102.2 105.2 15.0 0.8 14.2
reinvested earnings
1.2. Other capital 3.8 4.5 5.1 5.6 1.1 0.7 0.4
2. Portfolio investment 456.7 251.0 373.4 390.0 139.1 49.4 89.7
2.1. Equity securities 320.1 124.6 224.2 236.0 111.3 25.7 85.7
2.2. Debt securities 136.6 126.3 149.3 154.1 27.7 23.7 4.0
3. Financial derivatives 4.9 15.8 11.5 9.7 -6.0 - -6.0
4. Other investment 242.8 247.1 243.0 242.2 -4.9 -11.2 6.3
4.1. Trade credits 58.0 70.0 65.4 63.4 -6.6 -12.1 5.5
4.2. Loans 162.9 142.6 143.8 150.4 7.8 9.0 -1.2
4.3. Currency & deposits 15.9 26.9 22.4 17.4 -9.5 -11.8 2.3
4.4. Others 6.0 7.5 11.4 11.0 3.5 3.7 -0.2
<External debt> 383.2 377.9 397.4 401.9 24.0 13.2 10.7
Short-term 160.2 149.9 147.5 150.0 0.1 - -
Long-term 222.9 228.1 249.9 252.0 23.9 - -
C. Net IIP (C=A-B) -229.5 -113.1 -157.7 -148.0 -35.0 38.3 -73.2
<Net external assets
37.4 -30.1 3.0 15.2 45.3 53.9 -8.7
in debt instruments>

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(Appendix 2)

External Debt & External Assets in Debt Instruments

unit: billion dollars, %, %p

as of the end of 2007 2008 SEP 2009r 2009p changes

during year
External debt (A) 383.2 377.9 397.4 401.9 24.0
General government 31.7 21.1 25.4 27.8 6.7
Monetary authorities 21.9 31.2 39.4 39.6 8.4
By
Sector Banks 192.9 169.4 174.8 180.9 11.5
Other sectors 136.7 156.2 157.8 153.6 -2.6
Short-term 160.2 149.9 147.5 150.0 0.1
By <Proportion of short-term
1) 41.8 39.7 37.1 37.3 -2.3
Maturity external debt >
Long-term 222.9 228.1 249.9 252.0 23.9
Debt securities 136.6 126.3 149.3 154.1 27.7
Loans 162.9 142.6 143.8 150.4 7.8

By Currency & deposits 15.9 26.9 22.4 17.4 -9.5

Type Trade credits 58.0 70.0 65.4 63.4 -6.6
Others 6.0 7.5 11.4 11.0 3.5
Borrowings from affiliates 3.8 4.5 5.1 5.6 1.1
External assets in debt instruments (B) 420.6 347.9 400.4 417.1 69.3
General government 19.9 9.3 9.0 9.3 0.0

By Monetary authorities 267.5 205.6 259.3 275.1 69.5

Sector Banks 76.4 82.7 76.6 77.1 -5.6
Other sectors 56.8 50.3 55.5 55.7 5.4

By Short-term 333.1 280.2 329.2 345.0 64.8

Maturity Long-term 87.5 67.7 71.1 72.2 4.5
Reserve assets 262.2 201.2 254.2 270.0 68.8
Debt securities 53.7 27.2 26.0 25.5 -1.8
Loans 35.2 44.6 43.3 44.4 -0.3
By Currency & deposits 11.1 17.6 18.7 16.8 -0.9
Type
Trade credits 15.2 14.2 16.2 15.5 1.4
Others 36.4 33.4 30.7 32.9 -0.6
Loans to affiliates 6.7 9.5 11.2 12.1 2.6
Net external assets 37.4 -30.1 3.0 15.2 45.3
in debt instruments (B-A)
Note: 1) Short-term external debt / external debt (%)

1)
External Debt-GDP Ratio of Selected Countries

 U.K. 424.7%  U.S. 96.1%

 Hong Kong SAR 314.0%  Korea 50.8%
 France 200.6%  Japan 43.5%
 Germany 163.1%  Mexico 21.3%
Note: 1) External debt as of the end of Sep 2009 / Nominal GDP during 2008Q4-2009Q3
Sources: World Bank, OECD, Hong Kong Monetary Authority (HKMA)

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