The 2nd Government Bond Issuance Strategy Meeting Held... Next Year's Government Bond Issuance Limit Set at 176.4 Trillion Won

[Asia Economy Reporter Kwangho Lee] On the 9th, the Ministry of Economy and Finance held the 2nd Treasury Bond Issuance Strategy Council at the PPS Hall of the Seoul Regional Public Procurement Service, chaired by Vice Minister An Il-hwan, to discuss the 2020 treasury bond market trends, 2021 outlook, and the draft treasury bond issuance plan.

The Treasury Bond Issuance Strategy Council is a high-level consultative body established last year to facilitate close communication between the issuing authorities and market participants. This meeting was attended by eight investment institutions including banks, securities, and insurance companies, as well as two specialized research institutes, the Korea Institute of Finance and the Korea Capital Market Institute.

In his opening remarks, Vice Minister An emphasized the importance of the fiscal role in achieving rapid economic recovery and securing future growth engines. He explained that the annual issuance ceiling for treasury bonds next year was decided to be approximately KRW 176.4 trillion, similar to this year, through an expansionary budget formulation.

He also assessed that considering the solid demand from foreigners and domestic financial institutions, as well as the quantitatively and qualitatively significantly developed foundation of the Korean treasury bond market, the issuance volume next year is expected to be smoothly absorbed.

However, he pointed out that the possibility of temporary interest rate volatility expansion due to domestic and international treasury bond market conditions next year should not be overlooked, emphasizing thorough monitoring and a full commitment to proactive market stabilization measures.

Regarding the establishment of the treasury bond issuance plan for next year, he stated that the focus would be on enhancing market predictability by efficiently allocating issuance volumes by timing and maturity, considering the issuance of new 2-year treasury bonds and market supply-demand conditions.

The Ministry of Economy and Finance plans to finalize and announce the 2021 treasury bond issuance plan soon, fully reflecting the discussions from the Issuance Strategy Council. Furthermore, it will continue to identify institutional improvements that can enhance the treasury bond market capabilities through close communication with the market.

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