Foreign investors have continued to snap up South Korean bonds due to the country's relatively strong economic fundamentals, despite the ongoing eurozone debt crisis, officials said Friday.
The remarks came during a monthly policy consultation meeting between the finance ministry and the Bank of Korea (BOK) held earlier in the day. The meeting was attended by Vice Finance Minister Shin Je-yoon and BOK's senior deputy governor Lee Ju-yeol.
"Since early November, foreign investors have unloaded local stocks due to contagion fears about the eurozone debt crisis, but they are scooping up Seoul bonds mainly due to relatively sound economic fundamentals," the two institutions said in a statement.
Global financial markets are undergoing high volatility on fears that the eurozone debt crisis may hit major economies in the region, such as France. Germany's recent failure to draw enough money at its bond auction threw cold water on investor sentiment.
In the third quarter, the value of foreign investors' stock investment fell by $70.1 billion on-quarter to $267.5 billion, but offshore investors' bond investment rose by $3.2 billion to $190.8 billion over the cited period, according to the BOK.
The finance ministry and the BOK also said the growth of household loans was slowing on the back of the measures unveiled in June by the Financial Services Commission to stem household debt.
Although the growth of household lending eased, however, aggregate household debt rose to near 900 trillion won ($776.7 billion) in the third quarter, sparking fears that high indebtedness will curb consumer spending in Asia's fourth-largest economy. (Yonhap)