New value in Korean bond/swap basis play?

South Korea

Speculation during the past few days that the South Korean government may slap foreign investors in Korean Treasury bonds (KTB) with withholding tax - something from which they are currently exempt, while their onshore counterparts are not - has contributed to a sell-off of KTBs, according to market watchers. However, some dealers, such as France's Credit Agricole, believe the sell-off represents an opportunity to capitalise on the spread between treasury bonds and interest rate swaps

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