The European Union increased its investment in South Korea 24 percent year-on-year to US$204 billion in 2006, replacing the United States as the largest foreign investor in South Korea, the Bank of Korea said Sunday.

The EU was trailed by the U.S., which invested $191.5 billion in South Korea, and Southeast Asia with $97.4 billion, the central bank said. Aggregate foreign investments in South Korea reached $652.3 billion in 2006, up 21 percent from the previous year.

The EU had ranked second in 2005 with $163.9 billion invested in South Korea, trailing the U.S. with $184.7 billion.

Meanwhile, South Korea's overseas investment stood at $212.4 billion as of the end of 2006, up 42 percent from a year earlier, the central bank said.

Asia's third-largest economy invested the most in the U.S. with $55.5 billion. The EU was the second-largest investment destination with $48.9 billion, the bank said.

South Korea's bond investments in the United States stood at $25.6 billion in 2006, up 39 percent from the previous year mainly on institutional investors' appetite for safer assets, it added.

SEOUL, Jan. 13 (Yonhap)