South Korea's central bank said on March 19 that it will buy 1.5 trillion won (1.2 billion U.S. dollars) worth of government bonds to help stabilize the local bond market.

The Bank of Korea (BOK) said in a statement that in terms of face value, 1.5 trillion won of Treasury bonds with the maturities of three, five and 10 years will be purchased via an open bid for 10 minutes from 1:30 p.m. Friday local time.

It was aimed to stabilize the domestic bond market and use them in repurchase agreements transactions with commercial banks for liquidity adjustment, the BOK noted.

It would be the first time in over three years since November 2016 that the central bank directly bought state debts.

It would be different from the quantitative easing (QE) as it planned to be taken as a one-off action.

Volatility increased in the local bond market, following the steep fluctuations in the stock and current markets.

Futures for 10-year government bonds fell more than 2 percent in early trading as foreign investors raised bets on bond price decline.

Local stocks ended 8.4 percent lower, and the won/dollar exchange rate surged to the highest in around 11 years amid fears that the COVID-19 outbreak across Europe and the United States may drive the global economy into a recession.

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