South Korea’s central bank vows to stabilise markets amid political turmoil
The Bank of Korea aims to avoid any escalation in volatility of foreign exchange markets following Yoon’s failed martial law decree
South Korea’s central bank vowed to stabilise financial markets and highlighted the importance of “uninterrupted implementation” of key fiscal and economic measures, in its first statement since lawmakers voted to impeach President Yoon Suk-yeol.
“The Bank of Korea intends to utilise all available policy instruments, in conjunction with the government, to respond to and avert an escalation of volatility in financial and foreign exchange markets,” the central bank said on Sunday, addressing the fallout of Yoon’s failed martial law decree earlier this month.
Comparing the current situation with the impeachment phases of past presidents, the BOK said the latest case is “characterised by greater external challenges, such as heightened uncertainty in the trading environment and intensified global competition.”
“Should these external factors overlap with domestic ones, their impact may amplify,” the BOK said, calling for an interventionist approach to improving the economy. In the days after Yoon’s martial law declaration, the stock market plunged and the South Korean won fell against the dollar to the worst level since the global financial crisis.
The central bank’s message comes after South Korea’s parliament on Saturday voted to oust Yoon from office, a decision that must now be reviewed by the Constitutional Court. After the ballot, Prime Minister Han Duck-soo, who is serving as acting president, asked his advisers to step up their monitoring of financial markets, calling for “swift and bold” stabilising steps if needed.
“Predictability of the political process is expected to improve going forward and financial market volatility is anticipated to reduce” following the impeachment vote, the central bank said in its statement.
