SEOUL-- South Korea's central bank said Friday that it will buy 2 trillion won (US$1.67 billion) worth of state bonds as part of efforts to ease market volatility.

The bond purchase will be carried out on Monday, according to the Bank of Korea (BOK). The move followed a similar action to buy 6 trillion won worth of state bonds in the first half of last year.

The central bank said that the planned purchase is expected to ease volatility in the bond market.

Yields of Treasury bonds have been rising as the central bank is moving to normalize its long loose monetary policy aimed at bolstering the pandemic-hit economy.

On Friday, yields of the three-year government bonds rose 3.6 basis points to 2.194 percent. Bond prices move inversely to yields.

A central bank official said bond market volatility has been excessive amid expectations for increased demand for bond issuance to finance the government's recently-drafted extra budget and faster-than-anticipated policy rate rises in the United States.

Source: Yonhap News Agency