Last year, more than 226 trillion won in Treasury bonds were issued. That was nearly 70 trillion won more than a year earlier, an all-time high. Issuance surged due to two rounds of supplementary budget allocations last year.
The Ministry of Finance and Economy said in its publication Government Bonds 2025 on the 29th that total Treasury bond issuance last year was 226.2 trillion won. That was an increase of 68.5 trillion won from the previous year's 157.7 trillion won.
Treasury bond issuance includes refinancing to repay maturing bonds and issuance of deficit-financing bonds. If issuance of deficit-financing bonds to fund the supplementary budget and other needs expands, national debt can rise and interest expense can accumulate, burdening the management of public finances.
However, the government stressed that it smoothly absorbed the larger volume of Treasury bonds that increased from the two supplementary budgets compared with the previous year. Deputy Prime Minister and Minister Koo Yun-cheol said in a foreword that "our Government Bonds market became a strong support, backing efforts to swiftly execute the supplementary budget and fiscal measures to aid economic recovery."
As of last year, foreigners' Treasury bond holdings stood at 297.4 trillion won, the highest on record. The foreign share of Treasury bonds rose from 20.5% in 2022, 22% in 2023, and 22.8% in 2024 to 25.7% last year, also a record high.
Meanwhile, the total issuance limit for Treasury bonds this year is set at 225.7 trillion won. With large-scale issuance continuing, future expansion of foreign demand appears likely to determine stabilization of the Government Bonds market.
The government expects foreign capital inflows to continue in line with inclusion in the FTSE World Government Bond Index (WGBI) this month and an increased WGBI weighting next month. According to the Ministry of Finance and Economy, from the 1st to the 27th of this month, net purchases of Treasury bonds totaled 7.9 trillion won on a settlement basis. On a trade date basis, the figure was 10 trillion won.