Bonds Issued During the IMF Foreign Exchange Crisis Fully Repaid After 24 Years
2021~2025 National Guaranteed Debt Management Plan
[Sejong=Asia Economy Reporter Son Seon-hee] The government has fully repaid the bonds issued to overcome the crisis during the 1997 foreign exchange crisis this year. It has been about 24 years since the crisis occurred.
According to the '2021~2025 National Guarantee Debt Management Plan' released by the Ministry of Economy and Finance on the 3rd, the balance of guarantee debt this year was 11.3 trillion won, significantly lower than the previous plan (50.7 trillion won). National guarantee debt refers to the debt that the state must repay on behalf of the debtor if the debt defaults.
The nearly 40 trillion won reduction in guarantee debt balance this year is due to the fund bonds created to repay the Deposit Insurance Fund Bonds (Yebo Bonds) issued during the past foreign exchange crisis being fully repaid in August, eliminating the need for national guarantees. The original plan was to complete repayment by August 2027, but it was repaid six years earlier.
The government issued Yebo Bonds exceeding 80 trillion won by injecting large-scale public funds between 1998 and 2002, immediately after the foreign exchange crisis broke out. When the Yebo Bonds matured, the government reissued a total of 60 trillion won worth of Yebo Bond Repayment Fund Bonds between 2004 and 2018 to repay them, and this time, all of these bonds have been fully repaid.
As a result, not only this year but also the national guarantee debt balance from 2021 to 2025 is expected to improve. The government estimates that it will record 19.4 trillion won in 2022, 16.7 trillion won in 2023, 13.6 trillion won in 2024, and 9.7 trillion won in 2025, falling below the 10 trillion won level.
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An official from the Treasury Bureau of the Ministry of Economy and Finance said, "In the case of the Period Industry Stabilization Fund Bonds established last year due to the COVID-19 crisis, actual bond issuance was only 500 billion won compared to the guarantee limit of 40 trillion won, indicating low demand," and added, "We plan to maintain and manage the medium- to long-term national guarantee debt at an appropriate level."
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