Intervention watch – South Korea extends bond market stabilisation programmes into 2026

South Korea will extend its bond market stabilisation programmes through next year, as authorities seek to contain financial market risks stemming from shifting monetary policy conditions at home and abroad, as well as rising government bond issuance.

The Financial Services Commission (FSC) said on Monday that bond and short-term money market stabilisation funds totalling 37.6 trillion won (US$25.5bn) will remain in place through 2026. In addition, real estate project financing support programmes worth 60.9 trillion won will also be extended.

The regulator said it stands ready to deploy stabilising measures pre-emptively if market conditions deteriorate further, citing increased caution in domestic financial markets alongside rising bond yields and heightened foreign-exchange volatility.

The announcement follows the Bank of Korea’s decision last month to hold interest rates steady for a fourth consecutive meeting, after weakness in the won limited room for further easing and signalled the rate-cut cycle may be nearing its end.

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The move should help anchor bond market conditions and limit spillovers from global volatility, while reinforcing expectations that Korean policy support will remain active even as the BOK nears the end of its easing cycle.