Foreign investment in Canadian securities slowed to $2.8 billion in August, down from $15.3 billion in July. At the same time, Canadian investors reduced their holdings of foreign securities by $194 million as they acquired bonds but sold equities.

As a result, Canada's international transactions in securities generated a net inflow of funds in the economy of $3.0 billion in August.

Foreign holdings of Canadian bonds were down $7.4 billion in August, as non-residents reduced their holdings of both government and corporate bonds. This decline followed investment of $12.7 billion in July. The reduction in holdings of government bonds in August was all in federal bonds (-$3.8 billion). Foreign investors reduced their exposure to federal government bonds for the eighth time in nine months, totalling $33.1 billion over the period.