South Korea joins elite club of 25 economies in WGBI
South Korea joined the World Government Bond Index (WGBI) on Wednesday, the finance chief said, expressing hopes that the inclusion will help stabilize the country's foreign exchange (FX) and financial markets, Yonhap reports.
Finance Minister Koo Yun-cheol made the announcement in his social media post, highlighting that the WGBI is the world's most significant sovereign bond index.
WGBI, managed by FTSE Russell, covers government bonds from 25 major economies, including the United States, Germany, China and Japan, with tracking funds estimated at US$2.5 trillion to $3 trillion.
South Korea's full integration in the WGBI is expected to be completed by November.
"Foreign financial institutions and primary dealers of Korean Treasury bonds expect new inflows of around $50 billion to $60 billion with the WGBI inclusion, and actual inflows have been confirmed this week," Koo said.
The minister added the finance ministry and other financial authorities, including the Financial Services Commission and the Bank of Korea, will operate a special joint task force to smoothly complete the country's full inclusion into the index and attract foreign investment.
Earlier, it was reported that South Korea had raised fuel prices amid Middle East crisis.