Government Bond Market Advisory Committee Launched: "Over 200 New Investors Join Following WGBI Inclusion"

On May 12, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance Koo Yooncheol presided over the first Government Bond Market Advisory Committee meeting at the Government Complex Seoul, where he reviewed the inflow of foreign funds and trends in the government bond market following Korea's inclusion in the World Government Bond Index (WGBI).

At the meeting, Deputy Prime Minister Koo stated, "This year marks the first year for our government bond market to leap forward as an advanced market, thanks in part to our inclusion in the WGBI." He added, "The inflow of foreign funds is particularly significant given the continued volatility in financial markets, such as global inflation concerns stemming from the Middle East."

He further emphasized, "If foreign funds continue to flow in, it will contribute to stabilizing the domestic financial market and enhancing the credibility of our government bonds."

Advisory committee members reported that since Korea's inclusion in the WGBI, the proportion of mid- to long-term investors—such as Japanese pension funds—has more than doubled compared to short-term investors. They also explained that following the WGBI inclusion announcement in October 2024, as many as 200 new investors joined, and during April this year, the first month after the actual WGBI inclusion, as many as 80 new investors entered the market.

On the same day, Deputy Prime Minister Koo also presided over a meeting with major domestic branches of commercial and foreign banks to discuss foreign exchange market reform. The discussion covered preparations for launching a 24-hour foreign exchange market and implementing an offshore won settlement system.

Previously, the government unveiled a "Comprehensive Roadmap for Inclusion in the Morgan Stanley Capital International (MSCI) Developed Markets Index," which set targets of launching a 24-hour foreign exchange market in July this year and introducing the offshore won settlement system in January next year.

Deputy Prime Minister Koo stated, "The launch of a 24-hour foreign exchange market and the introduction of the offshore won settlement system are measures that will fundamentally reform the foreign exchange regime maintained since the Asian financial crisis." He added, "These initiatives will enhance accessibility for global investors and open a new horizon for the internationalization of the Korean won."