South Korea plans to issue a total of 79.8 trillion won (US$69.9 billion) worth of Treasuries in 2012 to raise the money needed to run the nation’s fiscal policy, the finance ministry said Wednesday.
The planned debt sale is 1.5 trillion won smaller than 81.3 trillion won issued last year, the ministry said in a press release. Of the total, 54.8 trillion won will be used to refund matured bonds.
“We will stick to our principle to issue the same amount of state bonds every month this year,” the ministry said. “Still, the monthly amount of bond issuance can be adjusted flexibly in consideration of fiscal demand.”
In particular, the ministry plans to sell state bonds that mature in 30 years for the first time in September. The move is aimed at running the nation’s fiscal policy in a more stable manner by securing longer-term capital.
Of state bonds, those with a maturity of three and five years accounted for nearly 60 percent last year. Bonds with the longest maturity of 20 years made up 15 percent, the ministry said.
South Korea’s outstanding state bonds stood at 340 trillion won at the end of last year, up from 310 trillion won in the previous year. Foreign investors held 60.9 trillion won or 17.8 percent of the total, the ministry said.
The ministry expects little difficulty in selling all the planned state bonds this year, saying that there is sufficient demand for the debts based on strong fiscal and economic health.
“We expect that our bond sale plan for this year will be carried out without much difficulty,” the ministry said. “There is trust being maintained for our state bonds at home and abroad thanks to the nation’s sound fiscal health and strong macroeconomic fundamentals.”