Government Reviews Inclusion of National Bonds in WGBI... Research Service Underway

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is attending the Ministerial Meeting on External Economy held at the Government Seoul Office in Jongno-gu, Seoul, on the 15th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Kang Nahum] The government is reconsidering the inclusion of South Korea's government bonds in the global bond index (WGBI) for the first time in over a decade.

According to the Ministry of Economy and Finance on the 24th, the government has been conducting a research project since the second half of last year to examine the effects of inclusion in the WGBI. This is a follow-up measure to the government bond market capacity enhancement plan announced that year.

If South Korea's government bonds are included in the WGBI, foreign funds tracking the index will flow into the government bond market, increasing the credibility of government bonds. However, there is also concern that increased foreign bond funds could lead to greater volatility during crises.

A government official explained, "We are internally continuing to review the expected benefits and risk factors if included in the WGBI."

Previously, the government attempted to join the WGBI in 2009, shortly after the global financial crisis, but the effort was ultimately unsuccessful.

Some argue that inclusion in the WGBI will be difficult for the time being. On this day, a foreign media outlet reported, citing officials, that the Korean government has decided to temporarily halt activities aimed at joining the WGBI.

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