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[이데일리 이윤화 기자] The 10-year government bond yield, which is the domestic long-term market interest rate, is expected to continue to rise due to the rise in government bond interest rates in major countries due to the expectation of a global economic recovery, and the increase in the amount of government bonds issued to respond to Corona 19.
On the 10th, the Bank of Korea announced in the’March 2021 Monetary Credit Policy Report’ released quarterly, “The future domestic long-term interest rate will be based on the fiscal and monetary policies of major countries and the trend of Corona 19, the movement of government bond rates in major countries, the domestic economic recovery tax, and the supply and demand situation of government bonds. It will increase further under the influence of the back.”
Korea’s 10-year government bond interest rate has steadily increased from 1.254% per year in August last year to 2.036% per year as of March 10th. At the end of last month, the 10-year US Treasury bond yields jumped to 1.96%, exceeding the 2% level as the interest rate of major countries’ treasury bonds increased, with the interest rate on US Treasury bonds exceeding 1.6% per year.
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Regarding this, the BOK said, “The rise in domestic long-term interest rates, which has continued since the second half of last year, is largely influenced by external factors such as rising interest rates in major countries due to global economic recovery and inflation expectations, and domestic supply and demand factors due to the expansion of KTB issuance have been added. It seems to have been caused.”
In particular, this year, expectations for economic recovery have been strengthened due to the promotion of large-scale economic stimulus measures following last year and the supply of vaccines, and inflation (inflation) pressure on the supply and demand side has increased. In addition, interest rates are expected to rise further as the outlook for net supply of mid- to long-term US treasury bonds, which is expected to be the largest in history, is added.
According to the U.S. Department of Commerce, the personal consumption expenditure (PCE) price index rose at the end of last year at a level of 1% (1.3% as of December), but the 10-year BEI (Breakeven Inflation Rate) reflected in inflation-linked government bonds was recently 2 It has expanded to a level higher than% (2.15% as of February 26). This means that the financial market’s inflation outlook has exceeded the Fed target (2%). Consumption is also showing a solid recovery. In the United States, the balance of personal savings reaches twice the long-term trend, so if economic activity normalizes, there is a possibility that private consumption will increase rapidly. In addition, rising production costs such as major raw material prices and shipping rates are expected to act as inflationary pressures.
Some economic indicators at home and abroad were announced positively, and since November of last year, the risk aversion sentiment eased due to the reduction of uncertainty in the US presidential election and the spread of the Corona 19 vaccine in major countries, which also contributed to the interest rate hike. In addition, concerns over the increase in the amount of KTB issuance in the process of responding to Corona 19 in Korea and supporting the economic recovery are expected to serve as a factor for the long-term interest rate rise. The total issuance of KTBs scheduled for this year is 17.4 trillion won, which is similar to 17.4 trillion won, reflecting the 1st~4th supplements of last year, but the volume of government bonds is further expanded by the formation of supplementary supplements to respond to Corona 19 such as the 4th disaster support payment. It is likely to be.
Accordingly, on the 26th of last month, the BOK announced a plan to simply purchase KTBs worth 5 to 7 trillion won in order to mitigate volatility in market interest rates due to the increase in the volume of KTB issuance in the future. Of these, the plan to purchase 2 trillion won was announced on the 9th. Purchase targets include 10-year government bonds worth 1.17 trillion won, 5-year government bonds worth 140 billion won, and 3-year government bonds worth 690 billion won.