Foreign investors' net selling of Asian bonds reached approximately $8.2 billion in September, marking the largest monthly outflow since March 2020. Bonds in South Korea, Thailand, India, Malaysia and Indonesia were widely sold.
Foreign investors recorded approximately $8.2 billion in net selling in Asian bond markets in September, the largest monthly outflow in more than six years. The bonds involved were those of India, Indonesia, Malaysia, South Korea and Thailand, and capital outflows were pronounced when combined with equity outflows.
Rising long-term US yields and expectations of further rate hikes by the Federal Reserve reduced appetite for emerging-market bonds. The change in the gross interest-rate environment is seen as a factor behind the outflows. Similar movements were observed in Asian government bond markets.
South Korean bonds recorded outflows of approximately $6.3 billion during the month, followed by $822 million from Thai bonds, $548 million from India, $436 million from Malaysia and $100 million from Indonesia. These figures reflect external capital flows across the broader market.
In addition to US interest-rate trends, persistently high oil prices are seen as reigniting inflationary pressures and curbing expectations for further easing by major central banks.