Bank of Korea Extends Bond Issuance Period
The Bank of Korea will completely overhaul the detailed operational methods of Monetary Stabilization Bonds to increase liquidity in the secondary market and strengthen the reserve requirement adjustment function. This measure, which focuses on extending the integrated issuance period for 1-year bon
The Bank of Korea has announced a comprehensive overhaul of its Monetary Stabilization Bonds to boost liquidity in the secondary market and bolster the reserve requirement adjustment function. This initiative, set to commence on August 31, includes extending the integrated issuance period for 1-year bonds from two months to three and designating benchmark issues.
Initially, 1-year bonds were issued on a fixed schedule, with the next dates set for March 1, June 1, September 1, and December 1. However, the new plan will adjust these dates to March 1, June 1, September 1, and December 1. Additionally, the Bank of Korea will implement an early buyback system twice a month, targeting three issues per round based on remaining maturity.
The bidding schedule for 1-year bonds will be moved to the first Wednesday of each month, while 2-year bonds will be bid on the second Wednesday. The 3-year bonds will retain their current bidding date. The Bank of Korea aims to strengthen its role as a benchmark interest rate indicator by introducing benchmark issues by maturity and revitalizing trading through consultations with related institutions.
The reorganization is set to be implemented starting with the 'September 2026 Monetary Stabilization Bond Issuance Plan,' and market participants are expected to adjust their strategies accordingly.
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