SEOUL, Feb 23 (Reuters) - South Korea's central bank chief on Tuesday said he will consider stepping up government bond purchases if an increase in issuance adds to volatility in bond yields, but stopped short of offering a concrete plan.
"The amount of treasury bond issuance will significantly increase this year, more so than in the previous years," Governor Lee Ju-yeol said in s parliament session.
"We will faithfully carry out role expected of this and help stabilize markets."
Lee, however, said it isn't appropriate for the Bank of Korea to directly acquire treasury bonds from the government, suggesting any bond buying will be made in the secondary market.
The government is working on a fourth round of cash handouts and a supplementary budget to help small businesses hurt by the pandemic.
The BOK is expected to use ad-hoc debt purchases to counter any undesirable tightening of monetary conditions which could slow the economy's recovery from the coronavirus crisis.
(Reporting by Cynthia Kim; Editing by Kim Coghill)
