10-Year Won Interest Rate Swap Decreases by 5.50bp

In the Seoul won interest rate swap (IRS) market, major segment rates, excluding the 1-year rate, have decreased, flattening the yield curve. As of 4:31 PM on the 27th in the Seoul bond market, the 1-year IRS rate rose by 1.25bp to 3.4450%. The 2-year rate fell by 4.50bp, and the 3-year rate decreased by 5.50bp. The 5-year rate dropped by 5.75bp to 3.8675%, while the 10-year rate fell by 5.50bp to 4.0025%. The IRS is an over-the-counter derivative that exchanges fixed and floating interest rates, with IRS rates by maturity serving as indicators reflecting the interest rate path anticipated by market participants. Although the 1-year rate increased, all segments of 2 years and above declined, narrowing the gap between short-term and long-term rates. A dealer from a securities firm explained that the market fluctuated with alternating offers and bids from foreign investors. The cross-currency swap (CRS) rates showed mixed directions by maturity, with the 1-year segment rising by 5.00bp to 3.4150%. Medium to long-term CRS rates decreased, with the 5-year rate falling by 3.50bp to 3.5500%. The swap basis inversion has narrowed across all segments.

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