The government registered more than 20 trillion won ($17.5 billion) in cumulative losses last year from operating its foreign currency stabilization fund, the finance ministry said Wednesday.

The government runs the fund, aimed at helping protect the local financial market from external shocks, by issuing state bonds and overseeing the raised money partly by investing in safe assets such as U.S. Treasuries.

According to the ministry, the fund's cumulative losses stood at 22.19 trillion won as of 2011. The ministry said that the fund lost 3.3 trillion won last year alone.

The amount represents a more than two-fold increase from 9.09 trillion won in cumulative losses the government registered in 2008.

The spike is attributable to a loss stemming from differences in interest rates applied for debt issuance and investment. The government had to pay higher rates in borrowing than the rates at which it invested.

The interest gap widened last year due in part to the eurozone debt problems, which encouraged investors to look for safer assets, causing a fall in interest rates for safer assets such as U.S. Treasuries.

Last year, the government logged 4.81 trillion won due to such interest differences, up from 3.65 trillion won a year earlier, according to the ministry. (Yonhap)