Ministry of Economy and Finance

On January 10th, Acting President and Deputy Prime Minister Choi Sang-mok, who also serves as the Minister of Economy and Finance, held a phone call with the UN Secretary-General Antonio Guterres to discuss cooperation between Korea and the United Nations.   Acting President Choi expressed gratitude to Secretary-General Guterres for offering condolences to the victims’ families of the recent Jeju Air plane crash and reaffirmed his commitment to stable domestic governance and management of foreign relations.   In particular, he highlighted that this year, which marks the 80th anniversary of the founding of the United Nations, Korea will continue to contribute to global peace and prosperity through active participation as a member of the UN Security Council, the Economic and Social Council, and the Human Rights Council.   Secretary-General Guterres showed full trust in the solidity and resilience of Korea’s democratic system and conveyed his condolences to the victims and their families of the Jeju Air plane crash.   He also welcomed Korea’s election as a member of main UN bodies, viewing it as a testament to the international community’s trust in Korea. He expressed anticipation for Korea’s continued role in restoring multilateralism centered around the UN and strengthening the organization.   Both sides agreed to enhance their joint efforts to tackle global challenges through continued close communication and cooperation. Please refer to the attached files.  

▶ Recently, government bond yields have shown a stabilizing downward trend.   In December, government bond yields rose in part due to external factors such as heightened concern over continued upward inflation pressure stemming from the U.S. President-elect Trump’s tariff policies and projections of the Federal Reserve’s slower policy rate cuts in 2025. However, starting in January this year, yields have resumed a stabilizing downward trend.   ▶ Foreign investment in government bonds remains robust.   In December, foreign investors’ government bond investment recorded a net outflow of 2.9 trillion won, but it is primarily attributed to the concentration of foreign-held government bond maturities (3.5 trillion won) in December.   On an annual basis, foreign investment in government bonds saw a net inflow of 19.2 trillion won in 2024, and in January this year, the trend has reversed back to net inflows.   In addition, Bloomberg reported on January 6th that regardless of political circumstances, global bond funds continue to buy Korean government bonds, showing strong confidence in the Korean economy.   ▶ Foreign investment in government bond futures has shown a tendency for repeat transactions aimed at realizing profits either in the present (selling government bond futures) or in the future (buying government bond futures), depending on interest rate forecasts and external factors that cause interest rate volatility. In December 2024, the net selling of government bond futures by foreign investors appears to be a result of their position adjustments for profit realization, which is part of typical market movements.   ▶ Even when foreign investors show a net selling trend in government bond futures, the impact on the government bond spot market remains limited.      When foreign investors’ net selling of government bond futures causes interest rates to rise, domestic investors are incentivized to purchase the treasury bonds at the higher    interest rates (lower prices).    Moreover, as government bond futures trading is a cash-settlement method, where only the difference between the parties is settled rather than trading the actual bonds, the impact     on the government bond spot market remains limited even if futures long positions are unwound.   ▶ The government is closely monitoring trends in the government bond market to ensure its stable operation and will prepare and implement a variety of market stabilization          measures as necessary. Please refer to the attached files.

Acting President and Deputy Prime Minister Choi Sang-mok, who also serves as the Minister of Economy and Finance, held a phone call on January 8th with Czech Prime Minister Petr Fiala to exchange views on ways to develop bilateral relations.   Acting President Choi expressed his gratitude for the condolences extended by major Czech officials for the recent Jeju Air plane crash, and his confidence that despite the difficult situation, the Korean government will continue to carry out its duties in each area including the economy and security without disruption, while managing foreign relations in a stable manner.   In addition, he stated that this year marks the 35th anniversary of diplomatic relations and the 10th anniversary of establishing the Strategic Partnership between the two countries; both countries should maintain a close consultation and work together unwaveringly to ensure the smooth progress of major cooperation projects, including the Dukovany nuclear power plant construction project, and important diplomatic agenda such as high-level exchanges.   Prime Minister Petr Fiala mentioned that the Czech Republic has trust in Korea’s resilience in democracy; as Acting President Choi pointed out, this year, which marks the 35th anniversary of diplomatic relations and the 10th anniversary of the establishment of the Strategic Partnership, is an important milestone for both countries to further enhance their amicable and cooperative ties.   Meanwhile, they agreed to continue discussions on specific measures to expand bilateral partnership to a wide range of areas, including advanced industries, science and technology, as well as the economy and finance, following their collaboration in nuclear energy. Please refer to the attached files.