POLITICAL TURMOIL:
Compared with previous impeachments, the latest case is ‘characterized by greater external challenges,’ the Bank of Korea said yesterday
South Korea’s central bank vowed to stabilize financial markets and highlighted the importance of “uninterrupted implementation” of key fiscal and economic measures, in its first statement since lawmakers voted to impeach South Korean President Yoon Suk-yeol.
“The Bank of Korea [BOK] intends to utilize 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 yesterday, 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 “characterized by greater external challenges, such as heightened uncertainty in the trading environment and intensified global competition.”
Photo: AP
“Should these external factors overlap with domestic ones, their impact may amplify,” the BOK said, calling for an interventionist approach to righting the economy.
In the days after Yoon’s martial law declaration, the stock market plunged and the South Korean won at one point tumbled against the US dollar to the worst level since the global financial crisis erupted in 2008.
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, South Korean Prime Minister Han Duck-soo, who serves as acting president, asked his advisers to step up their monitoring of financial markets, calling for “swift and bold” stabilizing 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.
South Korea’s main opposition leader Lee Jae-myung also underscored the importance of restoring normality. Lee proposed creating a bipartisan body involving parliament and the executive branch to discuss ways to stabilize the state and boost a flagging domestic economy.
“What we need to discuss right now is slumping domestic demand and the slowdown in the economy due to the shrinking fiscal role of the government,” Lee said at a news conference yesterday. “In order to solve this problem, I think we need to discuss the supplementary budget swiftly.”
The Constitutional Court has 180 days to rule on the validity of the impeachment motion passed on Saturday. If the court moves forward with removing Yoon, presidential elections must be held within 60 days.
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