SEOUL, June 20 (Xinhua) -- Foreign capital flowed into the South Korean financial market even after the U.S. Federal Reserve's interest rate increase earlier this year, South Korea's central bank said Wednesday.
According to the Bank of Korea (BOK)'s financial stability report submitted to the parliament, 6.4 billion U.S. dollars of foreign funds flowed into the domestic securities market in the January-May period.
Foreign investors bought 9.2 billion dollars in domestic bonds, while selling 2.8 billion dollars of local stocks.
It came after the Fed lifted its benchmark interest rate by a quarter percentage point to a range of 1.50-1.75 percent in March. The U.S. policy rate surpassed the BOK's target rate of 1.5 percent.
The BOK left its target rate unchanged since the bank raised it to the current level in November last year, the first rate hike in about six and a half years.
The Fed raised its benchmark rate further in June to a range of 1.75-2.00 percent, widening the gap between policy rates of South Korea and the United States.
The BOK report said financial instability was less likely to happen in the South Korean market given the continued current account surplus and the high sovereign rating, which it said has separated South Korea from other emerging economies.
