▲ The Ministry of Finance and Economy (Yonhap)

(LEAD) govt-bond buyback

(LEAD) Gov't to conduct 5 tln-won emergency bond buyback amid heightened volatility

(ATTN: RECASTS lead; ADDS byline, more info throughout)

By Kim Han-joo

SEOUL, March 26 (Yonhap) -- The government will conduct an emergency buyback of 5 trillion won (US$3.3 billion) in government bonds to stabilize the market, which has recently experienced heightened volatility, the finance ministry said Thursday.

The buyback will be carried out on two separate days -- 2.5 trillion won Friday and another 2.5 trillion won next Wednesday -- as the government seeks to reduce the economic impact of the prolonged war in the Middle East.

The move comes as uncertainties stemming from U.S. and Israeli airstrikes on Iran have triggered a sharp global bond selloff.

The ministry also plans to push for the net redemption of government bonds using excess tax revenue as part of a supplementary budget bill.

If approved, it would mark the first net redemption of government bonds through a supplementary budget in five years, since 2021.

The specific size will be determined during Cabinet deliberations and a parliamentary review, the ministry said.

Earlier in the day, the ruling Democratic Party and the government agreed to submit the extra budget bill to the National Assembly on Tuesday, aiming to ease the burden of rising oil prices and support small and midsize businesses, as well as vulnerable households affected by the prolonged conflict.

The government will also launch a monitoring team to oversee foreign capital inflows as the country prepares to join a key global government bond index managed by FTSE Russell, the ministry said.

Authorities will track fund movements and establish an immediate response system, holding regular meetings with relevant agencies to devise measures that facilitate smooth inflows.

(END)

[ⓒ K-VIBE. 무단전재-재배포 금지]