SEOUL– Foreign investors turned net sellers of South Korean securities for the first time in three months in December amid high U.S. interest rates, central bank data showed Thursday.
Their combined investment funds in local securities — stocks and bonds — came to a net outflow of US$2.42 billion last month, a sharp reversal from a net inflow of $2.74 billion in November, according to the data.
In October, their net inflow stood at $2.77 billion.
The central bank said the net capital outflow came as the U.S. benchmark interest rate was 1.25 percentage points higher than that of South Korea.
Also responsible were jitters over continued monetary tightening in the United States and other major economies, it added.
Foreigners’ bond investment funds came to a net outflow of $2.73 billion in December, compared with a net inflow of $630 million a month earlier and $280 million in October.
It marked the first net outflow in three months, and the amount was the largest in nearly three years.
In contrast, foreigners’ stock investment funds logged a net inflow of $310 million last month, down sharply from a net inflow of $2.1 billion in November and $2.49 billion in October.
Meanwhile, the premium on credit default swaps for South Korea’s five-year dollar-denominated currency stabilization bonds stood at a monthly average of 53 basis points last month, down 4 points from the previous month, according to the data.
Source: Yonhap News Agency