Emergency Martial Law Causes Severe Aftermath, Exchange Rate Soars to Highest in Over Two Years

Surges to 1,410 Won

Amid the aftermath of the 'emergency martial law declaration' that swept through the financial markets last night, the won-dollar exchange rate rose to the 1,410 won level for the first time in over two years on the 4th, based on the weekly trading closing price.

On this day, the won-dollar exchange rate in the Seoul foreign exchange market recorded 1,410.1 won as of 3:30 PM, up 7.2 won from the previous day. This is the highest level in two years and one month since November 4, 2022 (1,419.2 won).

The exchange rate started at 1,418.1 won, up 15.2 won from the previous day, and fluctuated between 1,406.1 and 1,418.8 won.

The exchange rate jumped to 1,442 won early in the morning but reduced its rise as the National Assembly resolved a demand to lift the martial law and it was lifted.

The political instability deepened as the martial law was declared and then lifted again last night, putting upward pressure on the exchange rate. Although the foreign exchange authorities announced that they would make every effort to stabilize the market, market anxiety remains.

Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok held an emergency macroeconomic and financial issues meeting (F4 meeting) at 7 AM at the Seoul Bank Hall with Bank of Korea Governor Changyong Lee, Financial Services Commission Chairman Byunghwan Kim, and Financial Supervisory Service Governor Bokhyun Lee, stating, "We will supply unlimited liquidity until the stock, bond, short-term, and foreign currency markets are fully normalized."

The Bank of Korea's Monetary Policy Committee also held an emergency meeting related to the declaration and lifting of martial law in the morning and decided on market stabilization measures, including the purchase of non-regular repurchase agreements (RPs).

Shin Minkyung, Hankyung.com reporter radio@hankyung.com