Published : 2013-10-02 09:45
Updated : 2013-10-02 09:45
South Korea plans to sell up to 33.8 trillion won ($31.5 billion) worth of currency stabilization bonds next year as it braces for potential increased market volatility, the finance ministry said Wednesday.
Of the total, 15.8 trillion won will be used to pay back maturing bonds, with 2 trillion won assigned to pay back debts earlier than scheduled.
The remaining 16 trillion won would be a net growth in currency bond issuance, according to the finance ministry. It is lower than the 19 trillion won set for this year.
In addition, the ceiling on issuance of such bonds denominated in U.S. dollar was raised from $1 billion for this year to $2.5 billion for next year, the ministry said.
The ceiling on dollar-denominated currency stabilization bonds has been fixed at $1 billion for the previous three years after rising to $6 billion in 2009. The government issued $3 billion and $1 billion worth of such bonds in 2009 and 2013.
"As volatility is growing in the foreign currency market, the need is also growing to secure money for market stabilization," a finance ministry official said. "There are quite a few risk factors even next year, so we need to prepare ourselves for possibly increasing capital flows in and out of our market. (Yonhap News)