Foreign Investment in South Korea Continues to Increase
Foreign direct investment in South Korea rose in July for a sixth month, helping support the Korean won.
In July, foreign investment amounted to $1.24 billion on an approval basis, rising 86.3% from $663 million a month ago, bringing the total for the first seven months of this year to about $3.70 billion, the Finance and Economy Ministry said.
The rise of investment in July--the second-biggest monthly investment ever in Korea--was mainly thanks to the heavy asset sales of Korean companies, combined with the financial institutions’ ability to attract foreign investors.
The increased investment could help bolster the won by boosting the dollar supply, reducing the cost to Korean companies of servicing their foreign debt.
Also, it would allow Korean companies to expand their production facilities without the burden of interest costs. The won strengthened 20.5% this year.
The largest of 94 investments in Korea during July was CommerzBank of Germany’s purchase of 30% of Korea Exchange Bank for $276 million. Among other investors was Wal-Mart Stores Inc., which purchased retail outlets.
During the first seven months, investment by Japanese companies increased the most, 163.6%, from the same period last year to $3.98 million.
U.S. and European companies both injected about $1.43 billion in Korea during the period.
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