SEOUL, April 4 (Yonhap) -- South Korea's central bank said Monday that it will purchase 2 trillion won (US$1.64 billion) worth of state bonds this week to ease financial market volatility.
The bond purchase scheme will be carried out on Tuesday, according to the Bank of Korea (BOK). This marks the second such bond buying this year after its purchase worth 2 trillion won in February.
The move comes as part of "market stabilization efforts" in response to rising yields in the bond market, according to the BOK. The plan is intended to raise the prices of bonds, which tend to move inversely with yields.
On Friday, the yield of the three-year government bonds jumped 12.1 basis points to 2.784 percent from the previous session's close. This marked the highest since June 12, 2014, when it stayed at 2.789 percent.
Treasury bond yields have been on the rise amid worries for the U.S. Federal Reserve's faster-than-anticipated rate hikes and growing demand for bond issuance to bankroll the Seoul government's extra budget to support the economy.
Investor sentiment in the bond market has also been roiled by concerns over rising inflation pressure.
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