Bank of Korea "Simple Purchase of 5 Trillion Won in Government Bonds by Year-End" (Update)

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] The Bank of Korea announced on the 8th that it will conduct a simple purchase of government bonds totaling around 5 trillion won by the end of this year. This plan for simple purchases until the end of the year is interpreted as a response to the recent unstable trend in the bond market, following the announcement of the largest-ever budget and the addition of the 4th supplementary budget.

On the day, the Bank of Korea stated, "Amid increased financial market uncertainty due to the resurgence of the novel coronavirus infection (COVID-19), government bond issuance is expected to expand in the future," adding, "The purpose is to proactively mitigate bond supply-demand imbalances and sudden fluctuations in market interest rates."

Although it may vary depending on market conditions, the Bank of Korea plans to purchase government bonds at the end of each month until the end of the year. Government bond purchases will be announced on the business day before the auction.

The Bank of Korea will conduct competitive bidding using a multiple interest rate method targeting institutions eligible for simple securities trading. The purchase scale and bond types will also be announced at the time of the auction notice.

A Bank of Korea official added, "Separately from simple purchases, if necessary, such as in the case of sudden market interest rate fluctuations, we plan to actively implement market stabilization measures." The Bank of Korea has conducted a total of four simple purchases of government bonds this year, each amounting to 1.5 trillion won, totaling 6 trillion won.

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