Bank of Korea to Simply Purchase 1.5 Trillion Won in Government Bonds... "Aiming to Stabilize the Bond Market" (Update)

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] The Bank of Korea announced on the 19th that it will conduct a simple purchase of government bonds worth 1.5 trillion KRW (face value) to stabilize the bond market and expand the securities eligible for repurchase agreements (RP).

The bidding will take place on the 20th from 1:30 PM to 1:40 PM. The payment settlement date is scheduled for the 24th.

The Bank of Korea also conducted a government bond purchase worth 1.5 trillion KRW in November 2016. At that time, after Donald Trump was elected President of the United States, the bond market fluctuated, prompting the Bank to carry out the bond purchase.

When President Trump was elected in 2016, expectations grew that the US interest rate hikes would accelerate due to large-scale economic stimulus policies, causing US market interest rates to rise sharply. Consequently, domestic government bond yields also increased, reaching yearly highs, leading the Bank of Korea to conduct a simple purchase of government bonds.

During the 2008 financial crisis, the Bank of Korea also purchased government bonds to stabilize the financial market.

A Bank of Korea official stated, "At present, there are no plans to regularly conduct additional simple purchases of government bonds," adding that they will respond according to market conditions.

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