South Korea to closely monitor bond market amid global yield hikes

By Kang Yoon-seung

SEOUL, Aug. 21 (Yonhap) -- South Korea will closely monitor its government bond market amid rising long-term yields in major economies and heightened economic uncertainties, the finance minister said Friday.

"Amid increased fiscal spending and uncertainties stemming from the Middle East, long-term government bond yields in major economies, including the United States, Japan and those in Europe, are rising to their highest levels in decades," Finance Minister Koo Yun-cheol said during a meeting with financial officials.

The meeting was also attended by Financial Services Commission Chairman Lee Eog-weon, Financial Supervisory Service Gov. Lee Chan-jin, and Bank of Korea Deputy Governor Park Jong-woo.

"The government will closely monitor issuance and trading conditions in the government bond market," Koo said, adding that Seoul will make efforts to minimize borrowing costs for businesses and households.

Koo, meanwhile, also noted that the Korean won traded at the 1,300 won level against the greenback this week for the first time in 11 months after weakening to the 1,550 won level in early July, amid the country's record current account surplus.

"However, considering geopolitical tensions in the Middle East and the monetary policies of major economies, there are both upside and downside risks to the exchange rate. The government will remain vigilant and respond to market volatility," Koo added.