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S. Korea's bond issuance drops in April on U.S. monetary tightening

Stocks 11:19 May 10, 2022

SEOUL, May 10 (Yonhap) -- Bond issuance in South Korea decreased in April from the previous month due to concerns about the U.S. monetary tightening, industry data showed Tuesday.

The value of bonds sold in Asia's fourth-largest economy came to 69.8 trillion won (US$54.6 billion) in April, down 900 billion won from a month ago, according to the data from the Korea Financial Investment Association.

The KOFIA attributed the issuance fall to the U.S. Federal Reserve's hawkish signal to raise the policy interest rates to rein in the high-flying price pressure.

In early May, the Fed raised its benchmark interest rate by a half-percentage point and indicated more rate hikes throughout the year.

S. Korea's bond issuance drops in April on U.S. monetary tightening - 1

Sales of government bonds dropped 2.9 trillion won to 25.7 trillion won in April, with those of special bonds decreasing 400 billion won to 7.8 trillion won.

But the issuance of corporate bond sales grew 700 billion won to 8.5 trillion won.

Sales of environment, social and governance (ESG) bonds declined by 70 billion won to 5.6 trillion won. ESG bonds are a type of sustainability debt offering aimed at financing corporate activities in environmentally friendly and sustainable projects.

As of end-April, the value of outstanding bonds in the country had stood at 2,548.8 trillion won, up 18.3 trillion won from a month ago.

Foreign investors bought a net 6.5 trillion won worth of South Korean bonds in April.

jwc@yna.co.kr
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