Bank of Korea Releases "Trends in International Finance and Foreign Exchange Markets after March"
Net Inflow of $3.67 Billion into Securities Market for Two Consecutive Months
Stock Funds See Net Outflow for 8th Month, While Bond Funds Record Significant Net Inflow
Foreign capital has recorded a net inflow into the domestic securities market for the second consecutive month. The scale of net inflow expanded, mainly driven by bond funds, as arbitrage opportunities increased.
According to the "Trends in International Finance and Foreign Exchange Markets after March 2025" released by the Bank of Korea on April 22, foreign investors posted a net inflow of $3.67 billion into the domestic stock and bond markets in March. Despite net outflows of stock funds continuing for the eighth consecutive month, the substantial net inflow of bond funds led to a larger overall net inflow compared to the previous month ($1.73 billion).
Stock funds saw a net outflow of $1.16 billion in March. As global trade uncertainties increased, net outflows continued for eight consecutive months since August of last year. However, expectations for an improvement in the semiconductor industry helped reduce the scale of net outflows compared to the previous month. In contrast, bond funds recorded a net inflow of $4.83 billion, as reinvestment funds flowed in due to increased arbitrage opportunities and robust demand for long-term bonds, despite the large-scale maturity of government bonds. This expanded the net inflow compared to the previous month ($3.54 billion).
The won-dollar exchange rate rose to 1,472.9 won per dollar at the end of March, up from 1,463.4 won at the end of February. The volatility rate in March was only 0.29%, down from 0.39% in the previous month. However, in April, the won-dollar exchange rate fluctuated significantly, surging due to concerns over U.S. tariff policies and U.S.-China trade tensions, then falling sharply as risk aversion eased following the postponement of mutual tariff impositions. As of April 18, the won-dollar exchange rate had dropped to 1,423.3 won. The volatility rate from April 1 to 18 reached 0.81%.
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