South Korea boosts share of corp bond investment in FX reserves

South Korea's central bank boosted the share of corporate bond holdings from its foreign exchange reserves of nearly $350 billion, data showed on Friday, which an official attributed to rising global interest rates. The share of corporate bonds out of the total investment made from the reserves rose to 15.9 percent by the end of last year from 12.9 percent at the end of 2012, while the share of government bonds fell slightly, Bank of Korea data showed.
Still the central bank held the bulk of 36.8 percent of the total in government bonds at the end of 2013, compared with 38.0 percent a year before, according to data in the central bank's annual report. An official at the central bank's reserves management team said the change reflected ongoing efforts to diversify investment while aiming to mitigate possible losses on its government bond holdings stemming from rising global yields. He said corporate bond yields tended to rise later or slower than those on government bonds.