South Korea’s central bank said it will purchase up to $2 billion (3 trillion won) of government bonds on Tuesday in an effort to stabilize the bond market after a recent surge in yields.

The Bank of Korea stated that it will conduct a competitive bidding operation to buy Korean Treasury Bonds with maturities of three, five and ten years. The purchase aims to increase demand in the bond market and counter recent increases in government bond yields, which move inversely to bond prices.

WHY IT MATTERS

The operation signals that policymakers are seeking to contain volatility in financial markets