South Korea's corporate bonds.

The government will double the ceiling of its corporate bond-buying facility run by state-run banks to 16 trillion won (about 11bn USD), Minister of Economy and Finance Choo Kyung-ho said on Sunday. The measure is aimed at easing volatility and concern of tight liquidity in corporate bond and short-term money markets, Choo said after a meeting with top financial officials, including the central bank governor and regulatory chief. Commercial paper issued by securities firms will be included in the facility's purchase list. At the same time, an additional 3 trillion won of liquidity will be supplied by the Korea Securities Finance Corp for securities firms experiencing liquidity shortages, he said.

Governor Rhee Chang-Yong told reporters that the Bank of Korea's monetary policy board would also consider its measures, such as reactivating a particular purpose vehicle to purchase corporate bonds and commercial paper first introduced during the pandemic.

But the premises of macroeconomic monetary policy are unchanged as this issue is temporary and particular to the commercial paper market.

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