Vice Minister of Economy and Finance: "Regular Issuance of Foreign Currency Bonds to Supply Market Liquidity... Communication with Overseas Investors"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Bo-kyung] Kim Yong-beom, the 1st Vice Minister of Strategy and Finance, stated, "The government will continue to regularly issue Foreign Exchange Stabilization Fund Bonds (Oe-pyeong-chae) to supply liquidity to the market and strengthen communication with overseas investors."

On the 12th, through his Facebook, Vice Minister Kim commented on the government's issuance of Oe-pyeong-chae worth $1.45 billion at the lowest interest rate ever. Oe-pyeong-chae are bonds issued by the government to raise funds for the Foreign Exchange Stabilization Fund, which is operated to stabilize exchange rates.

He said, "In the global bond market, interest rates are indicators that evaluate the issuer's credit and competitiveness," adding, "The issuance of Oe-pyeong-chae at the lowest interest rate ever is quite significant."

Regarding the dollar-denominated Oe-pyeong-chae issuance rate (1.198%) and the spread (50bp) reaching record lows, he said, "This will greatly contribute to reducing the foreign currency procurement costs of our companies and financial institutions," and evaluated, "Considering that overseas bond interest rates have not yet recovered to pre-crisis levels, this will also help domestic companies' issuance rates return to normal."

He added, "The record low spread on dollar-denominated Oe-pyeong-chae indicates a higher evaluation of the Korean economy and shows that government bonds are solidifying their status as global safe assets."

Vice Minister Kim also mentioned, "Through this issuance of Oe-pyeong-chae, the tangible and intangible benefits such as the expansion of foreign exchange reserves and reduction of private borrowing costs have been confirmed."

He introduced the government's preparatory work for the issuance of Oe-pyeong-chae. Vice Minister Kim said, "Unlike in the past, the government held a pre-issuance roadshow via conference calls on the 7th and 8th," adding, "We conveyed the high creditworthiness of Oe-pyeong-chae and collected and analyzed investment demand through the lead managers."

He continued, "From the internal review stage, the government considered the recovery prospects of the European economy and the need to diversify foreign currency procurement, preparing for the first euro-denominated Oe-pyeong-chae issuance since 2014," and said, "Although there were some concerns, we targeted investors by allocating much time to Europe during the global conference calls."

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