Foreign investors reduced their exposure to Canadian securities by $4.2 billion in March, marking a second consecutive monthly divestment. Meanwhile, Canadian investors bought $15.6 billion in foreign securities, mainly U.S. bonds, according to a Statistics Canada release Friday.
There was a $19.9-billion net outflow of international transactions in securities from the Canadian economy in March, bringing the total outflow to $45.9 billion in the first quarter of 2025.
Foreign investors reduced their holdings of Canadian shares by $12 billion in March, following a $21.9-billion divestment the month earlier. The pullback was led by shares in the banking, trade and transportation, and energy and mining sectors.
At the same time, non-resident investors acquired $11.9 billion in Canadian bonds while reducing their exposure to Canadian money market instruments by $4.1 billion.
There were foreign acquisitions of $13.1 billion in federal government bonds, moderated by a divestment in federal government enterprise bonds.
For their part, Canadian investors increased their exposure to foreign securities, including a $9.3-billion investment in U.S. bonds and $1.8 billion in U.S. government money market instruments. These were offset by a $1.8-billion reduction in holdings of non-U.S. foreign debt instruments.
Canadians also bought $7 billion in foreign equity securities, including $5 billion in U.S. shares in March. This followed a much larger $29.9-billion investment in U.S. shares in February.
The Bank of Canada reduced its policy rate to 2.75% in March, the Canadian dollar appreciated by 0.4% against the U.S. dollar, and the S&P/TSX composite index fell by 1.9%.