The suspension of the emergency decree has been lifted, but... How will the exchange rate, coins, and stock market react?

The financial market is showing signs of instability following the announcement of the suspension of the emergency decree by President Yoon Suk-yeol. However, concerns about the exchange rate rising sharply in the overnight market remain, as foreign exchange and financial authorities are mobilizing to address the situation.

According to related authorities on the 4th, Choi Sang-mok, the Chief Secretary for Economic Affairs, Kim Byung-hwan, the Chairman of the Financial Services Commission, and Lee Bok-hyun, the Governor of the Financial Supervisory Service, held a meeting at 7 a.m. to discuss the current economic and financial situation and inspect the foreign exchange and financial market conditions. This meeting, also known as the 'F4 Meeting,' is a gathering of heads of foreign exchange and financial authorities.

A comprehensive market stabilization measure is expected to be announced from the morning of this day.

The Chief Secretary presided over a meeting immediately after President Yoon Suk-yeol declared the emergency decree on the night of the 3rd, stating, "We will fully support financial and foreign exchange market stabilization measures such as unlimited liquidity supply to respond to market instability that may arise after the declaration of the emergency decree," and "From today onwards, we will hold daily economic and financial situation meetings to visualize the crisis management system and implement more comprehensive additional market stabilization measures after each institution's inspection."

The Financial Supervisory Service held a separate emergency financial situation inspection meeting at 1:30 a.m. on this day, chaired by Governor Lee Bok-hyun. They prepared necessary market stabilization measures to promptly respond to financial and foreign exchange market instability that may arise after the declaration of the emergency decree. The Governor urged the participating staff to "make the utmost effort to stabilize the market by maintaining a vigilant attitude and preparing a thorough response system for any situation."

After the declaration of the emergency decree, confusion was observed in various places such as stock prices, exchange rates, and the virtual asset market. According to the Korea Exchange, at 4:38 a.m. on the 4th, the KOSPI 200 futures index showed 325.35, down 5.65 points from the previous trading day, but it fell to 313.15 at 0:19 a.m. The market calmed down as the proposal to lift the emergency decree was passed in the National Assembly.

In the Seoul foreign exchange market that night, the won/dollar exchange rate rose sharply to 1,425.0 won, up 23.3 won from the previous trading day, but it started to rise sharply after the declaration of the emergency decree and reached 1,440.5 won at 0:28 a.m.

In the case of Bitcoin, it was traded at around 13 million won before the declaration of the emergency decree, but it surged to about 8.8 million won in just 30 minutes after the declaration. In domestic major virtual asset exchanges such as Upbit and Bithumb, there were cases where buy and sell orders were not executed.

However, according to CoinMarketCap, Bitcoin recovered its price to around 13.5 million won as of 4:38 a.m.

Korea Exchange is scheduled to hold a temporary financial market stabilization discussion in the morning of this day.

Financial authorities are also expected to discuss measures to stabilize the stock market's volatility. The decision on whether to open the stock market has not yet been made. Korea Exchange is expected to announce whether it will operate normally at 7:30 a.m. on this day.

President Yoon stated on the 3rd, "We declare the emergency decree to protect the Republic of Korea from the threat of North Korean communist forces and to safeguard the freedom and happiness of our people, who are being threatened by the treacherous pro-North Korean forces," and "We will take all necessary measures to protect the free democratic order."

Kim So-yeon, Hankyung.com reporter sue123@hankyung.com