South Korea’s central bank plans to issue a record 6.6 trillion won ($4.8 billion) in monetary stabilization bonds during mid-May, marking the largest amount to date.
Key Purpose and Demand Drivers
Officials state the issuance targets liquidity management amid currency supply fluctuations. These bonds serve as prime collateral in repurchase agreement transactions, driving strong investor demand.
Issuance Breakdown
The total includes 6 trillion won through competitive auctions and an additional 500 billion to 600 billion won via non-competitive bids. Competitive portions feature:
- 2-year maturity: 2.3 trillion won, up significantly from prior levels
- 91-day maturity: 2 trillion won
- 3-year maturity: 1.2 trillion won
- 1-year maturity: 500 billion won
Non-competitive bids cover 1-year, 2-year, and 3-year maturities.
Auction Timeline
Competitive auctions occur across seven sessions from May 4 to 26. Non-competitive bidding follows on May 27.
Repurchase Schedule
The bank expects to repurchase 3 trillion won mid-month, with 1 trillion won on May 12 and 2 trillion won on May 21. Such repurchases boost market liquidity significantly.
