S. Korea sees biggest foreign outflows since March ’20

South Korea’s capital markets saw the biggest foreign outflows in December since March 2020 due to increased political uncertainty affecting investor sentiment, according to central bank data on Wednesday.

Foreign investors continued to sell South Korean stocks for the fourth consecutive month, with a net outflow of $2.58 billion. In the bond market, they became net sellers after nine months, with an outflow of $1.28 billion.

The Bank of Korea (BOK) reported that the combined outflow of $3.86 billion in December was the largest since March 2020, during the global financial turmoil caused by the COVID-19 pandemic.

The Korean won depreciated by 5.2 per cent against the dollar last month, its biggest monthly decline in 22 months, due to increased political uncertainty following President Yoon Suk Yeol’s brief imposition of martial law on December 3.

Attribution: Reuters

Subediting: M. S. Salama