Photo : YONHAP News
South Korea’s government bonds have been included in the World Government Bond Index(WGBI).
Finance Minister Koo Yun-cheol announced the news in a social media post Wednesday, saying their inclusion is expected to help stabilize the country’s foreign exchange and financial markets, which are facing heightened volatility due to the ongoing war in the Middle East.
The WGBI is a global bond index compiled by FTSE Russell, a subsidiary of the London Stock Exchange Group, and includes government bonds from 25 major economies such as the United States, Germany, China and Japan.
Explaining the WGBI’s significance, the minister noted that it’s the largest index of its kind, with an estimated two-point-five trillion to three trillion dollars in assets tracking it.
Koo added that foreign financial institutions and dealers of Korean Treasury bonds expect new inflows of 50 billion to 60 billion dollars following the inclusion, adding that some inflows had already been confirmed this week.
He said his ministry and other authorities, including the Financial Services Commission and the Bank of Korea, will operate a task force for eight months through November to monitor the WGBI inclusion process and promote investment.