Choo Kyung-ho: "This Year's Government Bond Issuance Will Be Boldly Reduced Beyond Target"

"Flexible Adjustment of Government Bond Issuance Volume Considering Market Conditions"

Deputy Prime Minister for Economy Choo Kyung-ho attended the 'Emergency Macroeconomic and Financial Meeting' held at the Bankers' Hall in Jung-gu, Seoul on the 23rd, and is briefing the meeting results after the meeting./Photo by Yoon Dong-joo doso7@/Photo by Yoon Dong-joo doso7@

[Asia Economy Sejong=Reporter Kwon Haeyoung] Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho stated on the 25th, "Considering the fiscal capacity for the remainder of this year, we will boldly reduce the issuance volume of government bonds compared to the original target."

Deputy Prime Minister Choo attended the '9th KTB (Korea Treasury Bond) International Conference' on the same day and said, "We will flexibly adjust the issuance volume of government bonds in consideration of market conditions."

The planned issuance volume of government bonds for this year is KRW 177.3 trillion based on the supplementary budget. The cumulative issuance volume of government bonds until last month was KRW 144.2 trillion, reaching 81.3% of the annual issuance limit. The reduction in government bond issuance is interpreted as a measure to stabilize the bond market, which has recently experienced increased volatility due to concerns over the U.S. Federal Reserve's (Fed) interest rate hikes and credit tightening.

Deputy Prime Minister Choo said, "We will actively manage the maturity of government bonds going forward, secure sufficient capacity to respond to market instability, and strengthen policy coordination with related agencies."

He also announced plans to advance the infrastructure of the government bond market. He stated, "We will introduce 30-year government bond futures by the first quarter of 2024 and activate a dedicated network for the specialized government bond distribution market," adding, "We will also consider diversifying government bond products such as floating rate bonds to develop related infrastructure in the government bond market."

In addition, he hinted at the official inclusion in the World Government Bond Index (WGBI) and the introduction of government bonds for individual investors.

Deputy Prime Minister Choo said, "This year, the global bond market is experiencing one of the most difficult periods in history, to the extent that it is considered the worst year since World War II," and added, "As countries rapidly proceed with monetary tightening, the global financial market is experiencing high volatility." He continued, "The government is closely monitoring market conditions and operating emergency macroeconomic and financial meetings, with related agencies working closely together to do their best for stable market management."

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