Foreign holdings of Korean bonds hit new record

Foreign investments in bonds increased in 2012, spurred by monetary easing overseas that led to an inflow of capital seeking higher-yielding assets.

According to the Bank of Korea, foreign net shareholdings in Korean treasuries and monetary stabilization bonds reached a record high of 91 trillion won ($86 billion) as of the end of December 2012, accounting for 7 percent of the total.

Funds from the U.S., Hong Kong and Singapore were the biggest investors of Korean fixed-income securities, with the U.S. net holdings accounting for over 20 percent of the total.

Capital inflow has contributed to the strengthening of the won, but the central bank said it would implement countermeasures to keep the local currency from rising further against the U.S. dollar and the Japanese yen.

By Park Hyong-ki (hkp@heraldcorp.com)