The Ministry of Economy and Finance has finalized the issuance limit for next year's won-denominated Foreign Exchange Stabilization Fund Bonds (Won-denominated Forex Stabilization Bonds) at 13.7 trillion won. This is the same level as this year, and all funds raised will be used entirely for refinancing existing won-denominated Forex Stabilization Bonds.
On December 26, the Ministry announced the "2026 Won-denominated Forex Stabilization Bond Issuance Plan and Institutional Improvement Direction," reflecting the issuance limit confirmed by the National Assembly and the conditions of the bond and foreign exchange markets.
Next year, all won-denominated Forex Stabilization Bonds will be issued as one-year maturities, with the issuance method and maturity structure remaining unchanged from this year. The bonds will be issued through competitive bidding on the third Friday of every month, and there will be no consolidated issuance. A total of 31 institutions are eligible to participate in the bidding, including primary dealers (PDs) for government bonds, preliminary primary dealers (PPDs), and institutions eligible to bid for Monetary Stabilization Bonds.
The monthly issuance volume will be managed as evenly as possible to enhance market predictability, but the specific amount will be adjusted each month, taking into account the conditions of the bond and foreign exchange markets. In particular, the Ministry plans to continuously consult with the Bank of Korea to minimize competition with the one-year Monetary Stabilization Bonds of the same maturity.
In terms of issuance timing, the Ministry plans to increase the proportion of issuances in the first half of the year to 55-60% of the annual total, taking into consideration the year-end contraction of the money market and the scheduled inclusion in the World Government Bond Index (WGBI) in April next year.
The Ministry will also pursue institutional improvements to enhance liquidity and encourage participation in bidding for won-denominated Forex Stabilization Bonds. First, the Ministry will regularize the early redemption system. Early redemption will be carried out on the second Friday of each quarter-end month (March, June, September, and December) and will be operated at a scale of about 700 billion won, or around 5% of the annual issuance volume.
The early redemption targets will be two to three bond issues with 4 to 6 months remaining to maturity, and all eligible bidding institutions can participate through competitive bidding. The specific issues and redemption amounts will be determined for each round, reflecting the results of a survey of participating institutions and current market conditions.
In addition, to promote participation in bidding for won-denominated Forex Stabilization Bonds, the Ministry will also regularize the recognition of outstanding institutions. Based on successful bids over a 12-month period from December of the previous year to November of the current year, three institutions will be selected-one overall winner, one in the securities sector, and one in the banking sector-and will be recognized with an award each December in the name of the Deputy Prime Minister and Minister of Economy and Finance.
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