Photo : YONHAP News
South Korea will be included in the world’s leading global bond index, the World Government Bond Index(WGBI), starting in November next year.
FTSE Russell, the London-based global index provider, said Tuesday that it will add South Korea effective with November 2025 index profiles, phasing it in over a one-year period on a quarterly basis as the country’s market accessibility level is reclassified from one to two.
The decision follows the country’s fourth attempt to gain inclusion, two years after it was placed on the organization’s watch list.
FTSE Russell said the efforts of South Korean market authorities to improve the accessibility of South Korean government bonds for international investors had helped the country meet the criteria for market accessibility level two, a requirement for inclusion.
In a statement welcoming the decision, South Korean Finance Minister Choi Sang-mok said the global financial market recognized the domestic economy’s solid fundamentals, its vibrancy and its fiscal soundness.
The WGBI, the world’s largest bond index, currently contains government bonds from 23 major countries with an estimated two-point-five trillion U.S. dollars in tracking funds.
South Korea’s bond market is expected to attract as much as 90 trillion won, or around 67 billion dollars, in foreign capital thanks to its inclusion in the WGBI, leading to increased stability in interest rates and foreign exchange rates.