[Asia Economy Sejong=Reporter Dongwoo Lee] Choi Sang-dae, the 2nd Vice Minister of the Ministry of Economy and Finance, visited 'FTSE Russell,' the organization that calculates the World Government Bond Index (WGBI), to request cooperation for Korea's inclusion in the WGBI. He also held the first-ever roundtable in London to promote Korean government bonds.
The Ministry of Economy and Finance announced that on the morning of the 8th (local time), Vice Minister Choi held a bilateral meeting with David Sol, Global Head of Index Policy at FTSE Russell, in London, UK. FTSE Russell is a subsidiary of the London Stock Exchange Group and one of the world's largest market index providers. The WGBI calculated by FTSE Russell includes government bonds from 23 major countries such as the United States, the United Kingdom, and Japan, and is considered one of the world's top three bond indices. It is a key investment benchmark for global bond fund investors, with estimated assets under management of $2.5 trillion.
Inclusion in the WGBI requires meeting criteria such as a government bond issuance balance of over $50 billion and a Standard & Poor's (S&P) credit rating of A- or higher. Being included in the WGBI secures a status in financial markets befitting an advanced economy, which can lower bond issuance interest rates and attract additional foreign currency funds for bond purchases. The Korean government was added to the WGBI watchlist in September last year and is currently awaiting FTSE Russell's final approval.
During the bilateral meeting, the government expressed its commitment to FTSE Russell to improve the foreign investment environment in line with global standards and to promote inclusion in the WGBI and activation of foreign investment. Specifically, it introduced recent policies aimed at foreign investors, including tax exemption on interest and capital gains from government bonds and Monetary Stabilization Bonds, operation of a consolidated government bond account through international central securities depositories (ICSD) such as Euroclear within the year, a complete overhaul of the Investor Registration Certificate (IRC) system, and structural improvements in the foreign exchange market.
Following the FTSE Russell meeting, the government held an investor roundtable at the Stafford Hotel in London that afternoon. The event aimed to promote Korean government bonds to global investment institutions and explain recent improvements in Korea's foreign investor government bond environment. The government emphasized that Korea's government bond market is growing to an advanced country level, highlighting strengths such as the 12th largest government bond issuance balance worldwide and high government bond liquidity.
Vice Minister Choi said, "Considering recent improvements in the investment environment, now is the optimal time for global investors to take proactive interest and invest in Korean government bonds," adding, "I hope that opportunities for the Korean government to provide detailed explanations about Korea's economic situation and government bond investment to global investors will be frequently arranged in the future."
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