Global investors may adjust their portfolios by exiting their capital from South Korea in case of a prolonged security risk on the Korean Peninsula, a central bank monetary board member said Tuesday.
The unidentified member of the Bank of Korea monetary policy board has called for close monitoring of foreign investors as he issued the warning about a possible outflow of funds, according to the minutes of a September meeting.
In August, foreign investors offloaded South Korean stocks and bonds worth $3.25 billion due to security-related jitters and profit-taking. It marked the first sell-off by foreign investors since November 2016, when foreign investors shed South Korean stocks and bonds worth $490 million.
Bank of Korea headquareters in Seoul. (Yonhap)
Tensions spiked on the Korean Peninsula in August as North Korea announced a plan to launch ballistic missiles toward the US Pacific territory of Guam.
In response, US President Donald Trump said the US military is "locked and loaded" to deal with North Korea's provocations and North Korea would be met with "fire and fury" if it continued to threaten Washington.
North Korea did not follow through on its threat to fire ballistic missiles toward Guam, but the escalating tensions have sparked concerns about a possible military conflict on the Korean Peninsula, which remains technically in a state of war as the bloody 1950 53 Korean War ended in a truce, not a formal peace treaty. (Yonhap)
