South Korea's Ministry of Finance and Economy announced on the 24th that Q3 public bond issuance excluding government treasury bonds is projected to reach 67 trillion won, a 4 trillion won increase from the initial plan due to rising policy demand. The announcement was made at the third meeting of the Bond Issuing Institutions Council chaired by Hwang Soon-kwan, Director of the Treasury Bureau. The government confirmed it will continue the normalization policy for government treasury bonds and major public bonds in Q3, despite the projected issuance being 3 trillion won lower than Q2's actual performance.
South Korea Projects 67 Trillion Won Q3 Public Bond Issuance
The Ministry of Finance and Economy projected that Q3 public bond issuance excluding government treasury bonds will reach approximately 67 trillion won, representing a 4 trillion won increase from the initial plan due to increased policy demand. However, this figure marks a 3 trillion won decrease compared to Q2's actual issuance performance. The government and issuing institutions had previously decided at the second council meeting to normalize Q2 issuance volumes. Performance reviews revealed that issuance volumes decreased somewhat as May-June issuance conditions deteriorated more than expected.
Government Treasury Bonds Reached 124.1 Trillion Won in H1
Government treasury bonds totaled 124.1 trillion won (55.5%) in the first half, at the lower end of the early-year guideline range of 55-60%. For public bonds excluding government treasury bonds, 70 trillion won was issued in Q2, a 6 trillion won increase from the initial plan. For the entire first half, issuance was 1 trillion won below the initial plan. Participating institutions assessed that while recent interest rates remain at high levels, issuance conditions are improving, with bond demand showing some recovery since July.
Bond Issuing Institutions Plan Flexible Issuance Adjustments
The government and issuing institutions confirmed they will proceed normally with scheduled government treasury bond and major public bond issuances in Q3. Participating institutions plan to diversify issuance schedules and maturities considering bond market supply and demand, while flexibly adjusting bond issuance through foreign currency bond issuance and direct borrowing when necessary. In cases where sharp issuance increases are anticipated, the council agreed to adjust issuance volumes and timing on an as-needed basis through regular consultations.
Ministry Emphasizes Inter-Agency Coordination for Market Stability
Hwang Soon-kwan, Director of the Treasury Bureau, stated that "as domestic and foreign uncertainties surrounding the bond market persist in the second half, inter-agency cooperation for market stability remains crucial," adding that "we will consult and adjust issuance volumes and timing through ad-hoc meetings when necessary." The government and issuing institutions plan to continue joint responses for bond market stability while continuously monitoring Q3 market conditions. The meeting was attended by representatives from the Financial Services Commission, Financial Supervisory Service, Korea Development Bank, Export-Import Bank of Korea, Industrial Bank of Korea, Korea Electric Power Corporation, Korea Housing Finance Corporation, Korea Land and Housing Corporation (LH), and Korea Student Aid Foundation.
FAQ
What is South Korea's Q3 public bond issuance projection?
South Korea's Ministry of Finance and Economy projected that Q3 public bond issuance excluding government treasury bonds will reach approximately 67 trillion won, a 4 trillion won increase from the initial plan due to increased policy demand, though 3 trillion won lower than Q2's actual performance.
How much were government treasury bonds issued in the first half?
Government treasury bonds totaled 124.1 trillion won in the first half, representing 55.5% of the annual issuance target and falling at the lower end of the early-year guideline range of 55-60%.
