BOK to purchase $1.2bn in government bonds

Bloomberg

The Bank of Korea (BOK) said it will purchase 1.5 trillion won ($1.2 billion) in government bonds in order to stabilise markets amid the coronavirus crisis. Futures on the bonds rose after the announcement.
The BOK routinely buys government bonds, but the last time it bought them for the stated purpose of market stability was in 2016 when volatility increased following the unexpected election of US President Donald Trump.
The bank will buy three-, five- and 10-year bonds in auctions, it said in a statement.
BOK announcement sends bond futures high
“The BOK is showing a willingness to provide liquidity to markets in a squeeze,” said economist Kim Jin-myoung at Hanwha Investment & Securities. “The volume is too small to be seen as a signal for quantitative easing, though, because that would require plans for
an extended period of bond buying.”
The BOK announcement came the same day the government unveiled a 50 trillion won loan program to help small businesses hurt by the pandemic. Earlier in the week, parliament approved a 11.7 trillion won extra budget and the BOK slashed its key interest rate to a record low.