KRW 45.1 Trillion Treasury Bonds Maturing This Year... Interest Rates on a Downward Trend

Ministry of Economy and Finance Publishes 2019 Government Bond White Paper

Trend of Government Bond Yields in 2019.

[Sejong=Asia Economy Reporter Joo Sang-don] The amount of government bonds maturing this year has been estimated at 45.1 trillion won. This is 23.5 trillion won less than expected, due to early redemption and exchanges conducted.

The Ministry of Economy and Finance announced on the 6th that it has published the government bond white paper 'Government Bonds 2019' containing this information.

According to the report, the maturing amount has decreased from the initially expected 68.6 trillion won to 45.1 trillion won, a reduction of 23.5 trillion won. The amount maturing next year is also expected to decrease from 70.1 trillion won to 56.5 trillion won. A Ministry of Economy and Finance official explained, "To mitigate refinancing risk, early redemption and exchanges were conducted to proactively spread out the maturing amounts concentrated in 2020 and 2021."

Last year, a total of 101.7 trillion won worth of government bonds were issued. About 60% of the annual government bond issuance limit was issued in the first half of the year. As a result of actively responding to market demand and expanding long-term bond issuance, the remaining maturity of government bonds increased to 10.6 years, up 0.6 years from 10.0 years in 2018.

Last year, government bond yields fell sharply compared to the previous year due to concerns over global economic slowdown caused by the US-China trade dispute and the easing monetary policy stance of major countries. The 3-year bond yield dropped from 1.817% at the end of 2018 to 1.360% at the end of 2019, the 10-year from 1.948% to 1.683%, and the 30-year from 1.927% to 1.682%.

At the end of 2019, the balance of foreign holdings of domestic bonds recorded 123.7 trillion won, an increase of 9.9 trillion won compared to 113.8 trillion won at the end of 2018. In particular, with an increase in medium- to long-term investment-oriented investors, the share of foreign central bank holdings, which was only about 20% at the end of 2010, rose to 48.8% at the end of 2019.

This content was produced with the assistance of AI translation services.