Government to Cut KRW 5 Trillion in Government Bond Issuance, "Further Reductions If Needed"

Government Holds Market Situation Review Meeting

"Credit Spreads Have Also Widened This Year"

"Ongoing Review of Bond Market Interest Rates and Issuance Conditions"

On October 2, Deputy Prime Minister and Minister of Economy and Finance Lee Hyungil stated, "We will closely monitor trends in the government bond market and consider a further reduction in the issuance of government bonds if necessary." He also announced that, depending on market conditions, emergency buybacks and other market stabilization measures would be implemented in parallel.

At the market situation inspection meeting held this morning at the Korea Federation of Banks in Jung-gu, Seoul, Deputy Prime Minister Lee said, "To stabilize the government bond market, we have decided to reduce the October issuance of government bonds by 5 trillion won."

Deputy Prime Minister Lee emphasized, "In addition to government bonds, overall bond market rates are rising, and credit spreads have also widened this year. If high interest rates persist, there are concerns that refinancing burdens for lower-credit companies may increase. Therefore, relevant agencies will continue to monitor bond market rates and issuance conditions together."

This meeting, which was the first presided over by Deputy Prime Minister Lee since his appointment, was attended by Shin Hyunsong, Governor of the Bank of Korea, Lee Eogwon, Chairman of the Financial Services Commission, Lee Chanjin, Governor of the Financial Supervisory Service, and Hong Jisun, Minister of Land, Infrastructure and Transport, among the nation's economic and financial policy leaders.

The participants reviewed the trends in domestic and international financial and foreign exchange markets, as well as the bond and housing markets, and discussed response strategies. They agreed that as capital moves between the financial and real estate markets, mutual influence between markets may increase. Going forward, they will closely monitor potential risks including capital flows and debt in the financial markets, housing market, and households.

Deputy Prime Minister Lee stated, "Except for the Gangnam area, housing prices continue to rise in other regions, and in terms of supply, there is a time lag until actual occupancy, so continuous policy efforts are required in order to feel the effects of increased housing supply."

He added, "Especially during periods of high domestic and global uncertainty, it is crucial to detect early signs of even minor market anomalies. The Market Situation Inspection Meeting will be operated as a platform to identify where potential risks could start and spread, and to preemptively coordinate the response methods and roles of related institutions."

Regarding the internationalization of the won, he said, "We will soon announce measures to ease foreign exchange transaction regulations and complete the revision of the 'Foreign Exchange Transaction Regulations' within this year. While thoroughly managing risks by examining the possible impacts of foreign exchange regulatory reforms on the market, we will also strengthen inter-agency policy cooperation, including research on enhancing prudential regulation and monitoring."

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