SEOUL- South Korea’s bond market saw the biggest monthly foreign capital outflow in almost four years in December 2022, central bank data showed on Thursday, because of an increase in the amount of bonds that matured at the end of the year.
In the local bond market, foreigners logged a net outflow of $2.73 billion in December, compared with a net $0.63 billion inflow in November, according to the Bank of Korea (BOK). It was the biggest outflow since January 2019.
“The amount of local bonds that reach maturity increases every March, June, September and December. In the last month, it was $5.2 billion,” a BOK official said.
“The outflow was likely a temporary effect before investors set new investment plans at the beginning of a new year.”
In 2022, foreigners bought a net $11.72 billion worth of local bonds, much smaller than $56.15 billion in 2021 and the smallest since 2019.
South Korea’s central bank governor said the bank will do its best to ensure a soft landing for the economy amid significant internal and external uncertainty.
“The Bank of Korea, together with the government, will do its best in making sophisticated policy responses to achieve a soft landing of the South Korean economy, during this time of clouded visibility due to considerable external and internal uncertainties,” Governor Rhee Chang-yong said.
Rhee said the central bank will pay attention to growth and changes in financial and foreign exchange markets, while continuing to focus its monetary policy stance on stabilising prices. — Reuters
