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Foreign sell-offs of Korean stocks hit record high of US$11 bln in March

All News 12:00 April 10, 2020

SEOUL, April 10 (Yonhap) -- Foreign investors net sold the largest amount of South Korean stocks ever in March, central bank data showed Friday, amid continued jitters in the local stock market caused by the new coronavirus outbreak.

Foreigners dumped a net US$11.04 billion worth of local shares in the month, according to the data from the Bank of Korea (BOK).

The amount marks the highest monthly figure since the BOK began compiling such data in January 2007, a BOK official said. The previous record was $9.76 billion in a sell-off in August 2007.

In the photo, taken April 9, 2020, a screen shows the benchmark Korea Composite Stock Price Index closing sharply higher. (Yonhap)

Foreigners began to offload local shares shortly after South Korea reported its first case of COVID-19 on Jan. 20, dumping a net $2.66 billion of local stocks in February, as the country began to report massive numbers of new infection cases that month.

The number of new daily infections here peaked at over 900 on Feb. 29. It has since stabilized at around 100 and more recently at 50 or fewer.

So far, South Korea has reported a little over 10,000 cases of the disease that was first detected in China's Wuhan late last year.

Despite the curtailing of their stock holdings here, foreigners continued to net purchase South Korean bonds for a third consecutive month in March.

They bought a net $3.66 billion worth of local bonds in the month.

In the first three months of the year, foreign investors net sold $5.29 billion worth of Korean stocks and bonds.

The volatility in the foreign exchange market sharply increased in March amid fears of a coronavirus-caused liquidity crunch.

The daily average range of fluctuation in the won-dollar exchange rate jumped to 13.8 won in the month, compared with 5.1 won in February and 4.6 won the month before.

The local currency dipped to a decade low of 1,285.7 won per dollar in March.

In the photo, taken March 31, 2020, a Bank of Korea (BOK) official is seen inspecting U.S. banknotes, set to be delivered to local banks as the first batch of U.S. dollar injections under the BOK's bilateral currency swap arrangement with the U.S. Fed. (Yonhap)

The won-dollar exchange rate began to stabilize after the BOK began injecting U.S. dollars using its bilateral currency swap arrangement with the U.S. Fed last month.

The South Korean central bank has delivered at least $14 billion under the currency swap deal with the U.S. that can provide up to another $46 billion.

South Korea has bilateral currency swap deals with eight other countries, worth at least $190 billion in total, the BOK said earlier.


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