Foreign Investors Boost Domestic Bond Holdings

In a striking trend, foreign investors have significantly increased their net purchases of domestic bonds in Korea, marking a third consecutive month of growth. Last month's figures soared to 18.4780 trillion won, a 45% jump from March. This surge is attributed to the growing appeal of arbitrage trading amidst global tariff disputes and currency volatility.

Individual Investors Pull Back

Contrasting the foreign influx, individual investors scaled back their net purchases to 2.0583 trillion won, nearly half of March's total. The shift reflects growing concerns over economic recession, inflationary pressures, and the dollar's depreciation, which have dampened government bond yields.

Interest Rates on a Downward Trend

The yield on Certificates of Deposit (CD) fell to 2.71%, down 13bp from the previous month, as expectations of further base rate cuts grow in response to the economic slowdown.