Ministry of Economy and Finance Plans to Issue 166 Trillion Won in Government Bonds Next Year... Increasing Long-Term Bonds

[Sejong=Asia Economy Reporter Kim Hyunjung] The government will issue 166 trillion won worth of government bonds next year. The plan is to reduce the proportion of short-term bonds and increase the proportion of long-term bonds.

On the 24th, the Ministry of Economy and Finance announced the 2022 government bond issuance plan based on next year's macroeconomic conditions and the demand outlook of government bond investors. The annual issuance limit for government bonds next year is 166 trillion won, which is 14.5 trillion won less than this year's issuance volume.

The net increase issuance scale is 93.4 trillion won, down 27.2 trillion won from this year, while the refinancing issuance scale is 72.6 trillion won, up 12.7 trillion won from this year.

The government plans to issue more bonds in the first half of the year than in the second half, considering early fiscal spending and maturity repayment schedules. This year as well, the proportion of government bond issuance in the first half was 58.8%, higher than in the second half.

To increase market predictability, monthly issuance volumes will be distributed as evenly as possible, and issuance volumes will be flexibly adjusted at the end of the year. The issuance proportion of 2-year and 3-year short-term bonds will be lowered from 30% to 25%, and the issuance proportion of long-term bonds over 20 years will be raised from 30% to 35%. The issuance proportion of 5-year and 10-year bonds will be maintained at 40%, the same as this year.

This measure takes into account macroeconomic conditions such as monetary policy normalization and the steady long-term demand from insurance companies. For bonds with insufficient liquidity, issuance volumes will be maintained at this year's level but adjusted according to market conditions.

2-year bonds will be issued at around 7% of the annual issuance volume, and inflation-linked bonds will be issued at around 1 trillion won annually through a combination of competitive bidding and exchanges. Additionally, the government plans to promptly implement market stabilization measures such as emergency buybacks when necessary in the market.

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