Foreign Capital Posts Net Inflow for Fourth Consecutive Month: "Semiconductor Expectations Drive Turnaround in Equity Inflows"

Bank of Korea Reports on Trends in International Finance and Foreign Exchange Markets Since December 2025

Foreign capital has recorded a net inflow into the domestic securities market for the fourth consecutive month. This trend is attributed to a turnaround in net inflows of equity capital, driven by expectations of improved profitability for domestic semiconductor companies, as well as continued net inflows of bond capital, particularly from the public sector, despite a large volume of bonds reaching maturity.

The status board in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul displays the KOSPI and the KRW-USD exchange rate.

According to the "Trends in International Finance and Foreign Exchange Markets Since December 2025," released by the Bank of Korea on January 14, foreign capital posted a net inflow of 7.44 billion US dollars into the domestic stock and bond markets last month. This marks the fourth consecutive month of net inflows.

The main driver of the net inflow was bond capital, which recorded a net inflow of 6.26 billion US dollars. A Bank of Korea official explained, "Even though the amount of domestic bonds held by foreigners that matured in December 2025 reached 6.49 billion US dollars-the highest ever for the month of December-net inflows continued, mainly from the public sector." Equity capital also shifted to a net inflow of 1.19 billion US dollars within a month, influenced by expectations of improved profitability for domestic semiconductor companies due to rising memory prices.

The KRW-USD exchange rate stood at 1,439.0 won at the end of December 2025, down from 1,470.6 won at the end of November. As of January 12, 2026, it had risen again to 1,468.4 won. A Bank of Korea official explained, "The exchange rate initially rose due to non-residents turning to net buying in the offshore non-deliverable forward (NDF) market, but then fell sharply in the latter part of December due to foreign exchange market stabilization measures. Since the beginning of this year, however, the decline has slowed, influenced by the strengthening of the US dollar."

The daily volatility rate of the KRW-USD exchange rate in December 2025 was 0.36%, a slight decrease from 0.37% in November 2025.