(Yonhap)
South Korea has suffered the second-largest outflow of foreign stock investment funds among major Asian emerging nations over the past month amid a dollar shortage sparked by the coronavirus pandemic, data showed Monday.
Offshore investors withdrew $10.24 billion from the South Korean stock market between Feb. 20 and Wednesday, according to the data compiled by the Korea Center for International Finance (KCIF).
It was the second-largest outflow among major Asian emerging markets after Taiwan's $13.2 billion, showed the data based on a Bloomberg analysis. China and Hong Kong was excluded from the tally.
India came next with $7.33 billion, followed by Thailand with $2.05 billion, Indonesia with $620 million, the Philippines with $350 million and Vietnam with $250 million.
Foreign investors exodus from the emerging countries was attributed to an international dollar crunch triggered by the rapid spread of the coronavirus across the globe.
South Korean foreign exchange authorities said offshore investors' stock selling binge is weighing on the domestic currency market, despite a recent currency swap deal with the United States.
Seoul struck the $60 billion currency swap agreement with Washington last week, which marks the second of its kind since 2008 and will be in place for at least six months.
But the swap arrangement failed to stop foreigners dumping local stocks. Offshore investors sold a net 585 billion won Friday, extending their net selling to 12 sessions on end.
The government said it will lose no time in providing financial institutions and businesses with dollars by utilizing the swap facility and tapping foreign exchange reserves in case of a liquidity shortage.
As part of efforts to stabilize the currency market, South Korea raised the cap on bank's currency forward positions by 25 percent Thursday. (Yonhap)