"Inflow of $50 billion to $60 billion in bond investment due to the inclusion of the World Government Bond Index"

Analysis shows that if Korea is included in the World Government Bond Index (WGBI) from next year, up to $60 billion in foreign bond investment funds will flow in.

According to a report released by the Korea Financial Research Institute on the "Inclusion of the World Government Bond Index and Inspection of the Ripple Path of Capital Inflow and Credit Expansion," Korea will gradually be incorporated into the WGBI over a year from November next year.

At this point, the proportion of Korea's incorporation is expected to be around 2.22%, which is the ninth largest among WGBI incorporated countries.

The size of global funds that follow the global government bond index is estimated to be around $2.5 trillion in the market, and based on this, the Financial Research Institute analyzed that foreign bond investment funds worth $50 billion to $60 billion will flow into Korea during the transfer process.

In a report, the Financial Research Institute said rising asset prices and changes in financing conditions could lead to more credit supply capacity in the process of exogenously expanding foreign investor demand, and advised that macroprudential policies are effective in mitigating the effects of such capital inflows on credit expansion.