South Korea's Ministry of Economy and Finance has finalized next year's total treasury bond issuance ceiling at 225.7 trillion won ($158 billion), down 500 billion won from this year.
The ministry announced Thursday that it confirmed the 2026 treasury bond issuance plan based on next year's budget and market condition forecasts. Of the 225.7 trillion won in treasury bonds to be issued next year, the net issuance ceiling is set at 109.4 trillion won, down 2.8 trillion won from this year's 112.2 trillion won. Refinancing issuance will be 116.2 trillion won, up 2.3 trillion won from this year's 113.9 trillion won.
By timing, 55-60% of the total volume will be issued in the first half of the year, with 27-30% of the total volume allocated to the first quarter. Distribution was determined under the principle of equal monthly issuance, taking into account expenditure needs.
By maturity, issuance will be distributed as follows: short-term bonds (2-year and 3-year) at 35±5%, medium-term bonds (5-year and 10-year) at 30±5%, and long-term bonds (20-year, 30-year, and 50-year) at 35±5%. The target range for maturity allocation was set at ±5 percentage points to allow flexible responses to market uncertainty.
Meanwhile, Korean government bonds will begin to be included in the World Government Bond Index (WGBI) starting April next year. The ministry plans to improve treasury market infrastructure to ensure smooth foreign investment and strengthen risk management systems in response to treasury market growth. It will also pursue improvements to the Primary Dealer (PD) system, including expanding the fundamental demand base for government bonds and enhancing treasury market-making.
"We plan to devote all efforts to the stability and development of the treasury market so that next year can become the inaugural year of an advanced treasury market, with WGBI inclusion as the catalyst," the ministry said.
