SEOUL, 30th June, 2025 (WAM) -- The Bank of Korea (BOK) on Monday lifted restrictions on local institutions investing in foreign currency-denominated bonds issued for domestic use, known as kimchi bonds, in an effort to improve foreign exchange liquidity, officials said.
Under the new measure, foreign exchange institutions, including foreign exchange banks, securities firms and insurance companies, are allowed to invest in kimchi bonds without limitations starting Monday, according to BOK.
The restriction was introduced in 2011 to prevent debt issuance intended to circumvent currency loan regulations and to curb excessive domestic investment in foreign currency debt, Yonhap News Agency reported
With a growing imbalance in foreign exchange (FX) supply and demand, however, there have been calls to ease the regulations.