South Korea joins the World Government Bond Index

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South Korea’s Minister of Finance, Koo Yoon-cheol, said on Wednesday that South Korea has been added to the World Government Bond Index (WGBI) and expressed hope that this move will help stabilize South Korea’s foreign exchange and financial markets.

Koo announced the news on social media and stressed that the WGBI is the world’s most important sovereign bond index.

The WGBI is managed by FTSE Russell. It covers government bonds from 25 major economies, including the United States, Germany, China, and Japan, and tracks the estimated fund size of between $2.5 trillion and $3 trillion.

South Korea’s full inclusion in the World Government Bond Index is expected to be completed in November.

Koo said, “Foreign financial institutions and primary dealers of Korean government bonds are expected to add about $5 billion to $6 billion in capital inflows as a result of the WGBI inclusion, and this week’s actual capital inflows have already been confirmed.”

He added that South Korea’s Ministry of Finance and other financial regulators, including the Financial Services Commission and the Bank of Korea, will form a special joint task force to smoothly complete South Korea’s full inclusion in the index and attract foreign investment.

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