Did South Korea Borrow the Second Largest $113.65 Billion in Temporary Loans from BOK in 2025?
Synopsis
In a significant financial move, South Korea's government borrowed a staggering $113.65 billion in temporary loans from the Bank of Korea. This amount marks the second largest ever recorded and raises questions about the country’s financial strategies amid political turmoil. Discover the implications of this borrowing and its impact on the economy.
Key Takeaways
The South Korean government borrowed 164.5 trillion won in 2025.
This borrowing is the second-largest in the country’s history.
The funds were utilized to address short-term financial mismatches .
The government paid 158.09 billion won in interest on these loans.
Political instability has influenced the government’s financial decisions.
Seoul, Jan 7 (NationPress) The government has taken out the second-largest sum of temporary loans in history from the central bank last year via its overdraft facility, according to data released on Wednesday.
As per the figures from the Bank of Korea (BOK) submitted to Rep. Park Sung-hoon of the main opposition People Power Party, the total amount borrowed by the government from the BOK reached 164.5 trillion won (approximately US$113.65 billion) in 2025, which includes 5 trillion won borrowed in December.
This amount is slightly less than the record 173 trillion won recorded in 2024, according to reports from Yonhap news agency.
Specifically, the government borrowed 88.6 trillion won in the first half of 2025 amidst political unrest following the declaration of martial law in December 2024, and another 75.9 trillion won in the latter half of the year.
Consequently, the government paid 158.09 billion won in interest to the BOK last year, marking the second-highest annual interest expense on record, following 209.28 billion won in 2024, as per the data.
The overdraft facility allows the government to temporarily access funds from the central bank to manage short-term discrepancies between revenue and expenditures.
In addition, the Ministry of Economy and Finance announced on Tuesday that any unspent portions of last year’s defense budget will be executed as quickly as possible.
This statement came amid a controversy regarding the failure to pay around 1.3 trillion won (approximately US$899 million) in defense-related payments to military units and contractors by the end of last year.
“Among the items in the 2025 expenditure budget that could not be executed, spending will be carried out as swiftly as possible within this week,” the ministry stated in a press release.
The ministry also mentioned that they are in discussions with the defense ministry and other relevant departments regarding what is known as January revenue.
This term refers to tax and other revenue for the 2025 fiscal year that is legally required to be deposited into the state treasury by the second business day of 2026, which fell on Monday.
Point of View
It is crucial to highlight that while the borrowing of such a substantial amount from the Bank of Korea may raise eyebrows, it reflects the government's attempts to navigate through challenging political waters. The Nation must continue to monitor these financial moves and their longer-term implications for the economy and public welfare.
NationPress
5 Jul 2026
Frequently Asked Questions
What is the total amount borrowed by South Korea from BOK in 2025?
South Korea borrowed a total of 164.5 trillion won, equivalent to approximately $113.65 billion from the Bank of Korea in 2025.
Why did the government borrow such a large amount?
The government borrowed this amount to cover short-term financial mismatches due to political turmoil and other economic pressures.
How does the overdraft facility work?
The overdraft facility allows the government to temporarily access funds from the central bank to manage short-term discrepancies between revenue and expenditures.
What was the interest paid on these loans?
The government paid 158.09 billion won in interest to the Bank of Korea for these temporary loans in 2025.
What is 'January revenue'?
January revenue refers to the tax and other revenue for the fiscal year that is required to be deposited into the state treasury by the second business day of the following year.
