The South Korean government will gradually up longer-term sovereign debt pipeline to meet market demand and ensure stable financing against increasing social costs, said its deputy prime minister in charge of the economy.

“We will pay more attention to the market demands and voice,” Kim Dong-yeon, who also heads the finance ministry, told an international conference on the Korean Treasury Bonds in Seoul.

“Interest rates that have been kept at ultra-low levels for a lengthy period across the globe are beginning to move up,” he said.

“The government and market participants must demonstrate the strong partnership showed to cope with the 2008-2009 financial crisis,” he said.

The Korean government’s debt issues spiked 65 percent on year to 34 trillion won ($30.5 billion) in 2009 to fend off damages from the global financial meltdown. The colossal supplies, however, were promptly absorbed.

Kim vowed to ease the burden and strengthen basis for primary dealers, who buy the government bonds directly and resell them on the market.

Korea currently offers seven types of state bonds with maturities ranging from one to 50 years, with the longest 50-year paper debuting last year. The longer the term, the higher the interest rate tends to be and less volatile compared to their shorter-term counterparts at a time when interest rates are moving up.

Yields on the longer curve were unaffected by the news on Wednesday. The 10-year note yield fell 0.1 basis point to 2.538 percent while the 20-year note rose 0.1 basis point to 2.502 percent. Yields on the 30-year and 50-year notes remained unchanged at 2.500 percent.

By Cho Si-young and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]