South Korea faces political chaos, economic turmoil; won hits 15-year low at 1,480/USD.

Sharing is Caring!

Korean Won imploding against the U.S. Dollar, falling to its lowest level since the Global Financial Crisis pic.twitter.com/rlqvYHw9W1

— Barchart (@Barchart) December 27, 2024

South Korea is unraveling in a storm of political chaos and economic turmoil. The South Korean won has plunged to its weakest point since the Global Financial Crisis, trading at over 1,480 won per U.S. dollar. This staggering 15-year low is more than a currency crisis—it’s a reflection of a nation in deep trouble. Political instability, marked by the ousting of two presidents in a month, has shattered investor confidence and strained the economy to the breaking point.

The downfall began with President Yoon Suk Yeol, whose reckless attempt to declare martial law on December 3 threw the nation into chaos. Lasting only six hours, the ill-fated move led to his impeachment on December 14. The National Assembly’s overwhelming vote to suspend Yoon’s powers left the country reeling. Prime Minister Han Duck-soo briefly stepped in as acting president, but his tenure collapsed on December 27, as he faced unanimous impeachment over his refusal to appoint critical Constitutional Court justices. Now, Finance Minister Choi Sang-mok holds the reins as acting president, but his grip on a nation in freefall is tenuous at best.

The economic fallout has been brutal. The won’s depreciation has magnified foreign exchange losses, driving foreign investors away and forcing businesses to grapple with soaring costs. From local shops to industrial giants, the rising expense of imports is eating into profit margins, compounding an already dire situation. The benchmark KOSPI index has dropped 2%, and the exodus of foreign capital has left South Korea’s equity markets rattled.

Adding to the crisis, the U.S. Federal Reserve’s tight monetary policy has fortified the dollar, deepening the won’s decline. South Korea’s political and economic paralysis couldn’t come at a worse time. The rapid turnover in leadership has plunged the nation into uncertainty, further alienating foreign investors and tarnishing its economic prospects.

We have seen governments and presidents fall in multiple countries – not just because of wars

– South Korea
– France
– Germany
– Syria (war!)

Tough month for the politicos!

— The Rookie Consultant (@TheRookieCons) December 27, 2024