Published: October 21, 2024, 17:59
Shin Hanee shin.hanee@joongang.co.kr
A 50,000 won (approximately 36,000 yen) banknote is displayed in front of the South Korean flag. [REUTERS/YONHAP]
Government officials say FTSE Russell’s recent decision to include South Korea in its benchmark bond index is evidence of the country’s fiscal health and hailed the milestone as a catalyst for further expansion across capital markets. did.
Jeon Yeo-jin, director of the foreign exchange system division at the Ministry of Planning and Finance, said at a press conference that “one of the most frequently asked questions from foreign investors is regarding South Korea’s fiscal health due to the rapid aging of the population.” said. Monday at the government building in Sejong City.
“[FTSE Russell’s] “This decision reflects our confidence in the direction of Korea’s fiscal policy and our strong belief that investing in Korean government bonds will not result in losses for investors,” Chung said. “This is a big signal. [for global investors]which resolves many concerns about the Korean economy. ”
London-based FTSE Russell announced on October 9 that South Korea will next year join the World Government Bond Index (WGBI), the world’s leading bond index consisting of government bonds from 26 countries. The index is tracked by more than $2.5 trillion in funds.
This inclusion is expected to bring about 75 trillion won ($54.5 billion) worth of foreign capital into the Korean government bond market, creating a large and stable capital inflow that will increase liquidity and reduce volatility in the foreign exchange market. will also be connected.
Kwak Sang-hyuk, director of the National Debt Policy Bureau, emphasized that this result will promote growth not only in the government bond market but also in the capital market as a whole.
“While it is true that joining the WGBI will lower the government’s borrowing costs, I would also like to emphasize that it will attract very stable investment inflows into the market, leading to overall growth,” Kwak said.
“Funds will flow into the government bond market, which will ultimately help the growth of the corporate bond market as well.”
Kwak added that this will also encourage the South Korean government to issue green bonds in the future, which can be used to finance public projects focused on sustainability.
Written by Shin Hani [shin.hanee@joongang.co.kr]
