Asian bonds attract foreign inflows for 4th straight month

Asian bonds continued to attract foreign inflows for the fourth consecutive month in August, driven by optimism that the US Federal Reserve will begin easing interest rates in September.

Overseas investors made significant purchases of regional bonds in Indonesia, India, Malaysia, South Korea, and Thailand, totaling a net $14.06 billion in August.

This marked the largest monthly net purchases since at least 2019, according to data from regulatory authorities and bond market associations.

South Korean bonds experienced the largest foreign inflow since May 2023, attracting $5.99 billion. Indonesian bonds also remained popular, with $3.5 billion in investments, marking the fourth consecutive month of net gains from overseas.

Additionally, bonds from India, Malaysia, and Thailand attracted $2.14 billion, $2.06 billion, and $370 million, respectively.

Analysts anticipate that some Asian central banks may follow suit, with the Bangko Sentral ng Pilipinas (BSP) having already cut its interest rates by 25 basis points in August.

Attribution: Reuters

Subediting: M. S. Salama