After the Monetary Policy Committee of the Bank of Korea decided to maintain the benchmark interest rate at 2.75% in April, market interest rates closed significantly lower compared to the previous month. This was analyzed to be largely influenced by expectations of interest rate cuts due to economic recession.
The Korea Financial Investment Association noted on the 16th through the 'April Over-the-Counter Bond Market Trends.' At the end of April, the government bond yield for 2-year bonds stood at 2.323%, a decrease of 32.5 basis points (1 basis point = 0.01 percentage points) from a month earlier.
Last month, the bond issuance amount was recorded at 103.3 trillion won, an increase of 25.5 trillion won compared to March. This was driven by an increase in the issuance of government bonds and financial bonds.
The demand forecast for corporate bonds last month totaled 85 cases, with an amount of 5.84 trillion won. This represents an increase of 2.715 trillion won compared to the same period last year. During the same period, the amount participating in the demand forecast also rose to 33.113 trillion won, an increase of 11.549 trillion won. The participation rates by credit rating (amount participating in the demand forecast ÷ total forecast amount) were 604.4% for AA and above, 470.7% for A, and 380.0% for BBB and below.
In the over-the-counter bond market, the bond trading volume last month was 492.3 trillion won, a decrease of 13.4 trillion won from March. While trading volume for government bonds, special bonds, and financial bonds declined significantly, transactions for Monetary Stabilization Bonds and corporate bonds showed an increasing trend.
By investor type, transactions among securities firms increased while those involving banks, insurance, and asset management companies decreased. Foreign investors engaged in a total purchase of 18.5 trillion won, while individuals net purchased 2.1 trillion won worth of government bonds.