Won-denominated foreign exchange stabilization bonds worth 1 trillion won to be issued; no fiscal securities planned
First-half Treasury bond issuance reaches 124.1 trillion won, or 55.5% of annual target
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The government plans to issue 16 trillion won ($10.4 billion) in Treasury bonds in July, up 2 trillion won from the previous month. Rather than issuing fiscal securities, it will raise funds for foreign exchange market stabilization by issuing 1 trillion won in won-denominated foreign exchange stabilization bonds.
The Ministry of Economy and Finance on Thursday announced its Treasury bond, fiscal securities and won-denominated foreign exchange stabilization bond issuance plan for July 2026. The 16 trillion won in Treasury bonds will be sold through competitive bidding open to primary dealers.
By maturity, the breakdown is: 2.8 trillion won for two-year bonds, 3.3 trillion won for three-year bonds, 2.8 trillion won for five-year bonds, 2.8 trillion won for 10-year bonds, 400 billion won for 20-year bonds, 3.1 trillion won for 30-year bonds and 800 billion won for 50-year bonds.
To improve Treasury bond liquidity, the government plans to conduct bond exchanges worth 200 billion won between off-the-run 10-, 20- and 30-year bonds and the on-the-run five-year benchmark, and 100 billion won between off-the-run inflation-linked bonds and the on-the-run 10-year nominal benchmark. It will also carry out 2 trillion won in buybacks — early redemptions — of off-the-run Treasury bonds maturing in 2027 and 2028.
No fiscal securities will be issued in July. Fiscal securities are short-term government debt instruments used to cover temporary cash shortfalls arising from timing gaps between revenue collection and expenditure. As of Thursday, outstanding fiscal securities stood at 16.5 trillion won, while outstanding temporary borrowings from the Bank of Korea totaled 13.3 trillion won.
Won-denominated foreign exchange stabilization bonds will be issued at 1 trillion won, unchanged from the previous month. The one-year bonds will be sold through competitive bidding involving 31 institutions, including Treasury bond primary dealers, prospective primary dealers and institutions eligible to bid in monetary stabilization bond auctions.
Meanwhile, the government's actual Treasury bond issuance in June — including competitive bidding, non-competitive purchases and exchanges — came to approximately 17.1 trillion won. Cumulative first-half Treasury bond issuance this year reached 124.1 trillion won, or 55.5% of the annual issuance plan, within the 55 to 60 percent first-half pace target the government set at the start of the year.
fact0514@heraldcorp.com
