MoEF to Issue KRW 14.5 Trillion in May Treasury Bonds... Issuance Yield Surpasses 3%

4.3 Trillion Decrease Compared to April Issuance Volume

[Asia Economy Sejong=Reporter Kwon Haeyoung] The Ministry of Economy and Finance announced on the 28th that it will issue 14.5 trillion won worth of government bonds through a competitive bidding method in May. Due to the recent sharp rise in interest rates, the issuance rates of government bonds this month all surpassed 3%.

This amount is approximately 4.3 trillion won less than the issuance scale in April (18.838 trillion won). The issuance volume by maturity is ▲2-year bonds 1.1 trillion won ▲3-year bonds 2.5 trillion won ▲5-year bonds 2.6 trillion won ▲10-year bonds 2.8 trillion won ▲20-year bonds 700 billion won ▲30-year bonds 4.2 trillion won ▲50-year bonds 500 billion won. Inflation-linked government bonds will also be issued at a scale of 100 billion won.

The Ministry of Economy and Finance plans to conduct an exchange of about 200 billion won between the 10-year and 20-year outstanding bonds and the 30-year benchmark bonds to improve government bond liquidity.

Looking at the government bond issuance rates in April, the 2-year bonds recorded 3.050%, 3-year bonds 3.055~3.135%, 5-year bonds 3.145%, and 10-year bonds 3.390~3.410%, showing an upward trend. Until March, the issuance rates were at the level of 2.070~2.975%, but within a month, all maturities surpassed the 3% mark. This is the result of the global monetary tightening stance led by the United States, combined with excessive government bond supply due to multiple supplementary budgets (supplementary appropriations) so far, and the possibility of deficit bond issuance due to the second supplementary budget after the new government’s inauguration, which pushed interest rates higher.

The Presidential Transition Committee announced a plan for compensation for small business losses on the same day, stating that damage support payments will be made immediately after the second supplementary budget passes following the new government’s inauguration. The scale of the second supplementary budget is expected to be about 35 trillion won.

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