The government on Oct. 23 issued USD 1.7 billion worth of foreign exchange stabilization bonds at the lowest spread in their history. (Yonhap News)

By Margareth Theresia

The government on Oct. 23 issued USD 1.7 billion in foreign exchange stabilization bonds at the lowest spread in their history.

The Ministry of Economy and Finance said it issued such bonds worth USD 1 billion and JPY 110 billion (approximately USD 700 million).

This brings the combined value of such bonds this year to USD 3.4 billion. Following the issuance of EUR 1.4 billion in the first half of the year, the government issued bonds denominated in USD and JPY to mark its first time to issue them in all three major currencies in a single year.

The volume of issuance was also the largest since USD 4 billion in 1998.

The USD-denominated bonds had a five-year maturity and the ones in JPY two, three, 5.25 and 10 years.

The dollar bonds were issued at their lowest spread in history of plus 17 basis points over U.S. Treasuries. The yen bonds also had a spread in the 1% range, lower than that for those issued in 2023.

The bonds were issued with a low spread of around 10 basis points relative to U.S. Treasuries, which are deemed the world's safest asset, proving that the fundamental strength of the economy has matured to a new level.

The spread gauges investor assessment of the issuing country's economic fundamentals and external credibility. The government said the record-low spread demonstrates positive market assessment of Korea's recent economic situation and policy direction.

The Ministry of Economy and Finance said "This year's successful issuance of G3 currency-denominated bonds is seen to help improve Korea's overall requirements for foreign currency financing conditions."

margareth@korea.kr