South Korea Issues $3 Billion in Forex Stabilization Bonds Amid Economic Uncertainty

South Korea's Ministry of Economy and Finance has announced the issuance of $3 billion in foreign exchange stabilization bonds, marking the largest single issuance since 2009. According to RTHK, the issuance aims to provide significant preventive support to the country's foreign exchange reserves amid increasing external uncertainties. The government has issued $1 billion in three-year bonds and $2 billion in five-year bonds, with a spread of 12 basis points over U.S. Treasury bonds, the narrowest spread in history. South Korea's foreign exchange reserves have been declining in recent months due to measures taken to curb the depreciation of the Korean won. Concerns over excessive investment in artificial intelligence have led to a sharp decline in South Korean stocks, following a similar trend in U.S. markets overnight. The Seoul Composite Index has fallen for two consecutive days, briefly dropping below the 4,900-point mark this morning, potentially ending a six-week upward trend this week. The Korea Exchange temporarily halted program trading as futures plummeted by more than 5%.