SEJONG, June 25 (Yonhap) — South Korea’s finance ministry said Thursday it will extend a package of incentive programs for primary dealers in state bond auctions as part of its efforts to stabilize the bond market.

The ministry introduced the incentive programs for primary dealers, who buy state bonds directly from the government and sell them to the market, in April as it sought to stabilize the bond market in the face of a hike in sales of state bonds to fight the coronavirus pandemic.

The temporary programs had been set to expire at the end of June, but the ministry will extend them until the end of September, the Ministry of Economy and Finance said in a statement.

Under the incentive programs, primary dealers, mostly banks and brokerages designated by the government, are allowed to buy more state bonds through non-competitive bid options and conversion offers.

The ministry said such incentives had helped stabilize the bond market in the second quarter.

South Korea has increased its cap on selling treasury bonds to 167.8 trillion won (US$139 billion) this year, from an initial ceiling of 130.2 trillion won, to cope with the pandemic.

Ministry officials have said they will take swift measures to stabilize the bond market if volatility grows.

Earlier this month, the government proposed its third extra budget worth 35.3 trillion won to help key industries cushion the economic blow from the coronavirus pandemic and protect jobs.

Along with the third extra budget, the size of the stimulus packages increased to 270 trillion won.