Finance ministry plans 17 trillion won in August bond auctions

The finance ministry said Thursday it will issue 17 trillion won in treasury bonds through competitive auctions in August, an increase of 1 trillion won from the previous month.

The issuance plan covers 3.3 trillion won in two-year bonds, 3.6 trillion won in three-year notes, and 3 trillion won each for five-year and 10-year instruments. Longer-term debt includes 400 billion won in 20-year bonds, 2.8 trillion won in 30-year bonds, 800 billion won in 50-year bonds, and 100 billion won in inflation-linked securities.

Professional dealers and individual investors can purchase certain amounts at non-competitive bid rates, with final details depending on market conditions.

To enhance liquidity, the government will swap 300 billion won of existing 10-year, 20-year and 30-year bonds for new five-year benchmark issues and conduct a single 2 trillion won buyback of older bonds maturing in 2027.

The ministry will not issue any fiscal bills in August. These short-term instruments had an outstanding balance of 4 trillion won as of July 30.

Separately, the government will auction 1 trillion won in one-year foreign exchange stabilization bonds. Thirty-one institutions, including professional treasury bond dealers and monetary stabilization bond bidders, are eligible to participate.

"We will make every effort to ensure the stability and development of the bond market so that 2026 can become the first year of an advanced bond market," Deputy Prime Minister and Finance Minister Koo Yun-cheol said.

The annual issuance limit for treasury bonds in 2026 is set at 225.7 trillion won, comprising 109.4 trillion won in net issuance and 116.2 trillion won for refinancing and market-making purposes. Officials expect supply and demand conditions to remain favorable despite potentially weaker demand from falling interest rate expectations, citing the ongoing inclusion of Korean bonds in the World Government Bond Index.