The government said on the 26th that it would post a net redemption of Government Bonds as it draws up a supplementary budget. At the same time, the government decided to conduct a buyback of Government Bonds worth 5 trillion won.
That day, the government announced a "bond market stabilization plan" containing these measures. However, it did not disclose the exact size of Government Bond redemptions. It plans to decide the redemption size during the upcoming Cabinet meeting and National Assembly deliberations. It is the first time in five years since 2021 that the government is using excess tax revenue to redeem Government Bonds. The emergency buyback will be carried out over two days, on the 27th and on May 1. Each tranche of the buyback will be 2.5 trillion won.
Furthermore, with inclusion in the World Government Bond Index (WGBI) set for May 1, it will launch a "WGBI capital inflow task force" for continuous monitoring. Led by the director general of the Treasury Bureau at the Ministry of Economy and Finance, the task force plans to monitor foreign capital inflows and devise measures to facilitate them.
The Ministry of Economy and Finance said it would work closely with related agencies, including the Bank of Korea (BOK), to respond to high market volatility stemming from the Middle East situation and WGBI inclusion, and to manage the bond market in a stable manner.