Foreign investment in South Korea's stock and bond markets saw a net outflow of $4.5 billion last month, marking the seventh consecutive month of withdrawals. However, there was a slight net inflow in the domestic stock market.
According to the Bank of Korea's report on international finance and foreign exchange market trends released on September 17, the total securities investment by foreign investors, including stocks and bonds, recorded a net outflow of $4.5 billion in August.
This outflow was significantly reduced compared to the previous month's outflow of $21.65 billion. Nonetheless, the trend of net outflows has persisted for seven months.
By type of securities, the stock market saw a net inflow of $400 billion last month. This marked a reversal from the net outflows that persisted from January to July of this year.
A Bank of Korea official explained, "Despite the dampened investment sentiment due to geopolitical tensions in the Middle East and rising global long-term interest rates, the positive performance of U.S. tech companies contributed to the slight net inflow."
However, the official added, "When looking at the trading days, the net outflow expanded from $5.46 billion in July to $8.66 billion in August."
In the bond market, there was a net outflow of $4.53 billion. This increase in outflow was attributed to intensified incentives for short-term profit trading and rising market interest rates.
The credit default swap (CDS) premium for South Korean government bonds (based on the five-year foreign exchange stabilization fund bonds) decreased from an average of 23 basis points in July to 22 basis points in August.
In August, the average daily fluctuation range and rate of the won-dollar exchange rate were 4.4 won and 0.31%, respectively, significantly lower than the previous month’s figures of 8.8 won and 0.31%.
* This article has been translated by AI.
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