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OTC bond issuance gains in Oct.
SEOUL, Nov. 5 (Yonhap) -- South Korea's bonds issued over the counter (OTC) increased more than 9 percent in October from the previous month as local firms expanded their debt sales amid low interest rates, a trade association said Monday.

   The amount of OTC bond issuance came to 53.8 trillion won (US$49 billion) last month, up 9.07 percent from September, on increased debt sales by local banks, the Korea Financial Investment Association said.

   "The increase came as more firms resorted to debt financing following the central bank's slashing of the key interest rate," an official from the association said.

   The Bank of Korea lowered the benchmark 7-day repo rate by a quarter percentage point to 2.75 percent in October, following the second straight month of a freeze.

   On the other hand, the volume of OTC bond trading totaled 529 trillion won in October, off 2.4 percent from the previous month, as the market was closed for the Chuseok holiday on Oct. 1 and National Foundation Day on Oct. 3.

   Foreign investors continued their net buying of local bonds in October from the last month amid the rising won, scooping up a net 3 trillion, the data showed.

   On Monday, the local currency closed at 1,091.2 won against the greenback, down 0.3 won from Friday's close. It has continued to hover below the 1,100 won level since Oct. 25, when the won breached the level for the first time since Sept. 9, 2011.

   Meanwhile, the trading volume of bank certificates of deposit (CDs) also increased 63.3 percent in October to 3.56 trillion won from a month earlier, the association added.

   A CD is a financial instrument sold by banks and circulated in secondary markets by securities firms.

   The interest rate on the benchmark 91-day certificates of deposit stood at 2.85 percent in end-October, down 24 basis points from a month earlier, following the fall in the country's key interest rate. A basis point is 0.01 percentage point.