S. Korea issues FX stabilization bonds worth 70 bln yen

SEOUL, Sept. 7 (Yonhap) — South Korea’s finance ministry said Thursday it has issued yen-denominated foreign exchange stabilization bonds worth 70 billion yen (US$473.5 million).

It marked the first time for South Korea to issue yen-denominated foreign exchange bonds for Japanese institutional investors.

The foreign exchange bonds are sold to secure reserves against volatility in the currency market.

The yen bond was issued with maturities of three, five, seven and 10 years.

“The issuance of bonds denominated in yen with lower interest rates amid the high borrowing costs around the globe is aimed at reducing costs of securing foreign exchange reserves,” the Ministry of Economy and Finance said.

The latest measure comes in line with the efforts to expand bilateral economic ties with Japan.

In June, South Korea and Japan agreed to resume their currency swap, which has been stalled since 2015. The new arrangement, worth $10 billion, will be based on the U.S. dollar, facilitating the exchange of the Korean won for Japan’s greenback reserves and vice versa.