The Ministry of Economy and Finance in South Korea reported on Thursday that it has issued foreign exchange stabilization bonds worth 70 billion yen (US$473.5 million) denominated in yen. This is the first time such bonds were sold to Japanese institutional investors.
The bonds are intended to protect against currency market fluctuations and were issued with maturities of three, five, seven, and 10 years.
The ministry explained that the sale of bonds in yen with lower interest rates, despite high borrowing costs worldwide, is intended to reduce the cost of securing foreign exchange reserves.
This measure is in line with the initiative to expand economic ties between South Korea and Japan. In June, the two countries agreed to restore their currency swap, which had been halted since 2015. The new agreement, worth $10 billion, is based on the U.S. dollar and allows for the exchange of Korean won and Japanese greenback reserves.