Last year, the proportion of foreign ownership of Government Bonds approached 23%, marking a record high.
The Ministry of Economy and Finance published the Government Bonds White Paper 'Government Bonds 2024' on the 17th, which includes trends in the issuance and distribution market of government bonds and major policies.
Vice Minister of Economy and Finance Choi Sang-mok noted in the preface, "Last year was a year that marked a new milestone in the history of our government bond market with the confirmation of the inclusion of our government bonds in the World Government Bond Index (WGBI)." He added that the inclusion is expected to enable stable fiscal operations and reduce the funding expenses for the public and corporations.
He added that this would also contribute to the stability of our financial and foreign exchange markets and enhance the country's international creditworthiness, stating, "We were able to support economic recovery efforts even under difficult fiscal conditions through the stable issuance of government bonds."
The issuance amount of government bonds last year was 157.7 trillion won, an increase of 8 trillion won compared to the previous year. Foreign investment rose by 19.4 trillion won to 238.7 trillion won. This accounted for 22.8% of the total, marking the highest proportion of foreign ownership of government bonds ever.
It is interpreted that the ability for foreigners to invest in government bonds without opening accounts at domestic custodians and the extension of foreign exchange trading hours influenced this trend. Additionally, tax exemption procedures for interest and capital gains resulting from foreign investments in government bonds were simplified, and the registration system for foreign investors was abolished. Government bonds for individual investors issued totaled 737.7 billion won.
This year, more than 200 trillion won in government bonds is scheduled to be issued. The Ministry of Economy and Finance plans to further improve conditions for foreign investment to maximize the effects of WGBI inclusion. Additionally, plans are in place to issue 5-year government bonds for individual investors, open a nighttime trading market for government bond futures, and introduce green government bonds.