The Bank of Korea (BOK) announced on August 10 that it will partially reorganize its Monetary Stabilization Bond (MSB) issuance system.

MSBs are securities issued by the BOK to financial institutions, including banks, and the general public in order to control the money supply.

Through this reorganization, the BOK will extend the consolidated issuance period for 1-year MSBs from two months to three months.

Accordingly, the consolidated issuance dates will also be adjusted from the 9th of every odd-numbered month (January, March, May, July, September, and November) to the 1st of March, June, September, and December.

Early repurchases will be divided into the first Tuesday of every month (Early Repurchase I) and the third Tuesday (Early Repurchase II).

Early Repurchase I will be conducted according to a schedule determined by the remaining maturity, identical to the existing regular early repurchases.

Each session will target three issues, including one 1-year issue and two 2- or 3-year issues.

The remaining maturity for 1-year issues eligible for early repurchase will be adjusted to 4, 5, and 6 months, taking into account the extension of the consolidated issuance period.

Early Repurchase II will target around three issues per session, and specific targets will be announced through the monthly MSB issuance plan.

Issues that are excluded from Early Repurchase I due to this system change will be included in Early Repurchase II to ensure repurchase.

Bidding schedules will also be adjusted.

The issuance weeks for 2-year bonds and 1-year bonds will be swapped, moving 2-year bonds from the first Wednesday of the month to the second Wednesday, and 1-year bonds from the second Wednesday to the first Wednesday.

In addition, the BOK will designate benchmark issues by maturity for the relevant period through its monthly MSB issuance plans.

Among MSBs issued via competitive bidding, the most recently issued issue for each maturity will serve as the benchmark issue.

The BOK plans to consult with relevant institutions in the future to promote trading of benchmark issues and strengthen their benchmark functions within the market.

This reorganization plan will take effect on August 31.

The BOK plans to reflect the revised details in the "September 2026 Monetary Stabilization Bond Issuance Plan," scheduled to be announced on August 27.

(Photo: Yonhap News)