A one-way market

South Korea

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For Korean investors, it’s a case of having the cash but having no-where to spend it. Over the past two years, the country’s investors have been flush with surplus liquidity yet have had a limited supply of domestic assets to invest in. As such, hordes of Korean investors have turned to offshore assets, buying US dollar bonds and asset swapping them into Korean won.

This has led to two interesting phenomenon emerging over the past 18 months. Firstly, the sheer volume of asset swap activity has

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