SEOUL: The Swiss central bank has informed South Korea of its intention to buy the Asian country's domestic government bonds for the first time, a Seoul newspaper reported on Monday, citing a finance ministry official.
Several Asian central banks have recently boosted investment in South Korea's won-denominated government bonds but such moves by Western countries are relatively rare, the Maeil Business Newspaper reported.
"(Both countries) are discussing details such as the timing and amount of the possible purchase, and I expect it to be made in the near future," the newspaper quoted an unnamed official at the ministry as saying.
Finance ministry officials have said more central banks plan to buy South Korean bonds and that the government intended to have prior discussions with them to keep the local market stable.
"It is true that central banks of advanced countries as well as those in Asia are interested in investing in our government bonds, but nothing has been decided on purchase plans," the finance ministry said in a statement issued in response to the report.
Foreign investors boosted their holdings of South Korea's won bonds by a net 7.11 trillion won ($6.32 billion) last year in addition to a net 16.91 trillion won recorded in 2010, according to official data.
Central banks in many countries have been diversifying their foreign-currency reserves into higher-yielding but relatively safe assets in emerging-market economies away from the US dollar, for which interest rates are kept near zero.
Foreign ownership of South Korean government bonds remains relatively low at 6.9 percent as of the end of last year, up from 6.6 percent at the end of 2010, data shows.
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