About $36.6 billion in foreign investment funds flowed out of Korea's stock and bond markets last month, the largest on record. With domestic stock prices surging and concerns about an economic slowdown growing due to the Middle East crisis, it is seen as the result of foreigners moving to take profits en masse.
According to the "Trends in international finance and the foreign exchange market after March 2026" that the Bank of Korea released on the 12th, foreign investment in securities posted a net outflow of $36.55 billion last month. That is the largest since related statistics began in 2007.
Securities investment funds recorded net inflows of $9.12 billion in September 2025, $2.29 billion in October, $2.68 billion in November, $7.44 billion in December, and $2.39 billion in January 2026, but turned to a net outflow of $7.76 billion in February. The net outflow trend continued in March.
Stock investment funds led the overall trend with a net outflow of $29.78 billion. This also marked a record high, far exceeding the previous peak in February this year ($13.5 billion). The Bank of Korea (BOK) said, "As profit-taking sales continued, risk-off sentiment intensified due to geopolitical risks in the Middle East, expanding the scale of net outflows."
Bond investment funds also added to the move with a net outflow of $6.77 billion. Bond funds saw a net outflow for the first time in five months since October last year (-$720 million). Typically, at the end of a quarter, maturities of Treasury bonds cluster, returning principal to investors and tending to increase the scale of capital outflows. But last month, as the volume of maturing bonds rose sharply from previous years, outflows expanded further. An official at the Bank of Korea (BOK) explained, "The usual size of bond maturity redemptions is under $10 billion, but this time it exceeded that."
Meanwhile, the average daily trading range and the day-over-day volatility of the won-dollar exchange rate last month were 11.4 won and 0.76%, respectively, wider than the previous month (8.4 won and 0.58%, respectively). The Bank of Korea (BOK) said it "rose considerably due to higher international oil prices from the prolonged Middle East situation and large-scale net selling of domestic stocks by foreigners."