South Korea's short-term foreign debt declined to its lowest level in eight years on a fall in banks' overseas borrowing, the central bank said Wednesday.

The country's short-term external debt totaled $112.8 billion as of end-December, down $14.3 billion from a year earlier, according to the Bank of Korea (BOK).

It marked the lowest level since 2005 when short-term foreign debt hit $65.9 billion.

Korea's total external debt amounted to $416.6 billion as of end-December, up $7.2 billion from the previous year.

The rate of the short-term debt against the country's total debt reached 27.1 percent as of the end of last year, down from 31.1 percent the previous year.

The ratio of the short-term debt against foreign reserves came to 32.6 percent as of end-December, down from 38.9 percent a year earlier.

Korea's short-term foreign debt had been a major headache during past financial crises as surges in foreign debt left local banks vulnerable to external shocks.

South Korea's net external credit reached $188.9 billion as of end-December, up $58.1 billion from the previous year, the BOK said. (Yonhap)