The Ministry of Economy and Finance said on the 25th it will issue a total of 16 trillion won in Treasury bonds next month through a competitive bidding method with participation by primary dealers (PD). That is an increase of 2 trillion won from this month's issuance plan (14 trillion won).
By maturity, the issuance sizes are ▲ 2-year: 2.8 trillion won ▲ 3-year: 3.3 trillion won ▲ 5-year: 2.8 trillion won ▲ 10-year: 2.8 trillion won ▲ 20-year: 400 billion won ▲ 30-year: 3.1 trillion won ▲ 50-year: 800 billion won.
To expand Treasury bond liquidity, the government will also pursue an exchange of 200 billion won between off-the-run issues of 10-, 20- and 30-year bonds and the 5-year on-the-run benchmark, and 100 billion won between inflation-linked off-the-run issues and the 10-year nominal benchmark.
In addition, for off-the-run Treasury bonds maturing in 2027–2028, it plans to conduct a one-time buyback (early redemption) of 2 trillion won before maturity.
As of the day, the actual Treasury bond issuance this month, including competitive bidding, non-competitive underwriting, exchange and offerings, is 17.1 trillion won. Accordingly, the cumulative Treasury bond issuance in the first half of this year is 124.1 trillion won, or 55.5% of the plan at the start of the year. This falls within the government's target progress range for first-half issuance (55%–60%). However, the final issuance size may change somewhat depending on the results of the 20-year non-competitive underwriting to be announced on the 26th.
Meanwhile, the government decided not to issue Treasury financing bills next month. Treasury financing bills are short-term Government Bonds issued to cover temporary cash shortfalls arising from timing gaps between revenue and expenditure.
Currently, the outstanding balance of Treasury financing bills is 16.5 trillion won, and Bank of Korea temporary borrowing fund is 13.3 trillion won. The average outstanding balance from the start of the year through the 25th was 13.9 trillion won and 1.4 trillion won, respectively.
In addition, the 1-year won-denominated Foreign Exchange Equalization Fund Bond (FX stabilization bond) will be issued this month in the same 1 trillion won size.