KOREAN NET

Deputy Prime Minister and Minister of Economy and Finance Choi Sang Mok (center) on Oct. 9 at Government Complex-Seoul in the capital's Jongno-gu District announces the country's entry into the World Government Bond Index of the London-based Financial Times Stock Exchange Russell. (Ministry of Economy and Finance)

By Yoo Yeon Gyeong

The country has joined the World Government Bond Index (WGBI) two years after making the latter's watch list in September 2022.

Financial Times Stock Exchange (FTSE) Russell, a British provider of global stock market indexes, on Oct. 8 said in its semi-annual review of country bond classifications that Korea will join the WGBI in November next year.

The WGBI is one of the top three indexes for government bonds followed by global investors, along with the Bloomberg-Barclays Global Aggregate Index and JP Morgan Government Bond Index-Emerging Markets.

FTSE Russell said Korean government bonds represent 2.22% of the WGBI on a market value-weighted basis, or ninth among 26 member nations. The top eight were the U.S. (40.4%), Japan (10.2%), China (9.7%), France (6.7%), Italy (6%), Germany (5.2%), U.K. (4.8%) and Spain (4%).

Given WGBI follower funds worth an estimated USD 2.5 trillion, injection of at least USD 56 billion is forecast into the Korean government bond market. This will not only alleviate the financial burden on companies but also stabilize market interest and exchange rates.

Deputy Prime Minister and Minister of Economy and Finance Choi Sang Mok said, "This was the result of the global financial market's recognition of our economy's strong fundamentals, dynamism and fiscal soundness, as well as trust in the policy direction of the incumbent government over the past two years."

dusrud21@korea.kr