WGBI decision over S.Korean bonds not yet made -official

SEOUL, Oct 22 - Citigroup has not made a final decision on whether to include South Korean treasury bonds in its World Government Bond Index, a senior official said on Thursday.

"Nothing has been decided over the WGBI inclusion," said Kim Yi-tae, a department head at the Finance Ministry, told Reuters.

He rejected reports by local newspapers citing unnamed government officials that the nation's bonds may not be included by the end of this year.

The Korea Economic Daily reported that the South Korean government may want to delay inclusion, fearing massive foreign fund inflows to the local debt market putting more upward pressure on the already firmer won.

Citigroup declined to comment on the issue.

"It's not clear whether there is some procedural problem in the inclusion or if the South Korean government wants a delay because of concerns over the rising won," said Kong Dong-rak, a fixed-income analyst at Taurus Investment & Securities.

"Whatever the reason, any delay would disappoint many debt investors who have bought government bonds in expectation of inclusion in the index. This would be especially bad news for long-dated issues as foreign investors trailing the index are known to play long-term," Kong said.