SEOUL, May 16 (Yonhap) -- Foreign investors bought more South Korean bonds in May than a month earlier amid the country's solid economic fundamentals, industry sources said Thursday.
Foreigners held 113.2 trillion won (US$95 billion) worth of listed South Korean bonds as of Wednesday, up 3.4 trillion won from the end of April.
The net inflow of foreign bond funds during the first half of this month was larger than the previous month's net purchases of 2.3 trillion won.
The increase came despite a recent tumble in the value of the South Korean currency against the U.S. dollar. Fixed-income investors tend to avoid high currency volatility, which could lead to foreign-exchange losses.
The local currency closed at 1,188.60 won against the greenback on Wednesday, down 4.7 percent from end-March. This month alone, the South Korean unit fell as much as 20 won.
Market watchers said the increased net inflow appears to reflect foreign investors' confidence in South Korea's economic fundamentals.
South Korea's foreign exchange reserves hover above $400 billion, and there are high expectations the country's current account balance will likely remain in the black, despite falling exports.
Other positive factors include growing hopes of an interest rate cut by South Korea's central bank, the sources added.
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