South Korea would not flood the bond market with a big treasury bond issue in order to fund an extra budget, if the plan went ahead, a finance ministry official said on Friday.
Local media reports have said the government is considering an additional budget of between five trillion won ($4.24 billion) and six trillion won to help boost sluggish domestic spending that has been holding back a full-swing recovery in the world's 12th-largest economy.
The bond market has been paying a close attention to talk of a supplementary budget plan, because the government might have to issue additional treasury bonds to fund the plan.
Speculation over the plan has been weighing on bond market sentiment.
"The ministry has not yet decided whether to set an extra budget. But even if we introduce one, we would not try to raise funds in just one monthly treasury bond offering plan," said Choi Kyu-yun, director at the finance ministry's treasury bureau.
The finance ministry will announce its treasury bonds issuance plan for next month on June 2.
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