South Korea's Finance Minister Choo Kyung-ho announced on Thursday that the country will begin issuing new 3-year government bonds targeting retail investors next year. The move aims to expand the investor base of the government bond market and aligns with plans for South Korea's inclusion in a major global government bond index.

Choo revealed the plan during a video speech at the 12th Korea Bond Market Conference. He stated that South Korea's bond market is set to be included in the FTSE Russell World Government Bond Index (WGBI) in April next year, which will lay the foundation for the market's growth.

To attract foreign investment, South Korea will introduce 3-year bonds specifically for individual investors and provide periodic interest payments for government bonds. The initiative also seeks to boost demand for short-term bonds such as fiscal bills and won-denominated foreign exchange bonds.

Additionally, the South Korean government will establish a dedicated market monitoring team to develop strategies for stabilizing the bond market and managing potential risks.

According to data from the Ministry of Finance, the total issuance cap for government bonds next year is set at 225.7 trillion won ($153.2 billion), with approximately 55-60% of bonds to be issued in the first half of the year.

The ministry added that in terms of maturity, around 35% of the bonds will be 2-year and 3-year bonds, 30% will be 5- to 10-year bonds, and 20- to 50-year bonds will account for 35%.