Seoul: The government has announced plans to conduct an emergency bond buyback valued at 5 trillion won (US$3.3 billion) as part of efforts to stabilize the volatile government bond market, the finance ministry reported Thursday. This move comes in response to the increased market fluctuations experienced recently.
According to Yonhap News Agency, the buyback will be executed over two separate days, with 2.5 trillion won being allocated on Friday and another 2.5 trillion won scheduled for the following Wednesday. The government's strategy aims to mitigate the economic impact stemming from the ongoing conflict in the Middle East.
The finance ministry has also revealed its intention to pursue the net redemption of government bonds using surplus tax revenue. This initiative will be included in a supplementary budget bill. Should it receive approval, it would be the first instance of net redemption of government bonds through a supplementary budget since 2021.
The ministry further clarified that the exact amount for redemption will be decided during Cabinet discussions and subsequent parliamentary review. In an earlier agreement reached on Thursday, the ruling Democratic Party and the government resolved to present the supplementary budget bill to the National Assembly on Tuesday. This step is designed to alleviate the pressures of increasing oil prices and to provide support to small and medium-sized enterprises, alongside vulnerable households affected by the continuing Middle Eastern conflict.