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South Korea Plans First Won-Denominated FX Bonds in 21 Years - bloomberg
(Bloomberg) -- South Korea aims to issue its first won-denominated foreign-exchange stabilization debt in more than two decades next month, according to a finance ministry official with direct knowledge of the plan.
The government plans to sell up to 20 trillion won ($13.8 billion) of debt in 2025, with issuances planned once a month from January 24, said the person, who declined to be identified as the matter is private. The size of the monthly note hasn’t been decided, the person added.
Yonhap Infomax earlier reported that the notes are estimated to amount to about 1 trillion won to 2 trillion won each month.
The sale of the won FX stabilization bonds would help the nation fight volatility in the currency market, particularly when the won is seen as too strong. The move is intended to help reduce won funding costs and strengthen the stability of the nation’s foreign-exchange equalization fund, the official said.
The issuance, which was initially planned for earlier this year but was postponed due to a delay in law revisions, has nothing to do with a recent weakness in the won, the official said.
The local currency fell to the weakest since 2009 this month as a hawkish Federal Reserve bolstered the dollar and domestic politics weighed on local assets.
