Though South Korean President Yoon Lifted the Briefly Imposed Martial Law, Korean Won Can Plunge Again if South Korea’s Sovereign Credit Rating is Revised

South Korea’s opposition parties jointly called for the impeachment of President Yoon Suk Yeol after he pushed the nation into a political crisis by briefly imposing martial law — for the first time since 1979 — in response to their urge to improve contacts with North Korea. The Korean won plunged deeply, but recovered from losses.

The South Korean won yesterday became one of the biggest movers, initially plunging against the U.S. dollar to a more than two-year low. According to NYT, Korea Republic officials pledged “unlimited” support to markets as traders digested the implications of the brief declaration of martial law.

Meanwhile, South Korea’s stock market has been among the worst-performing in the world. It has nosedived more than 7% YTD, representing a sharp contrast to many major indexes that have posted double-digit gains.

Meanwhile, most likely, it’s not the end of a story for the Korean won, and many Fx analysts expect new currency plunges. In fact, now the opposition parties have called on President Yoon to resign, but the president withdrew from addressing their grievances. He has also cancelled a meeting scheduled for today. These events could impact South Korea’s sovereign credit rating, and if that happens, there will certainly be more ordeals for Korean won.