Bank of Korea Warns Economic Impact Could Be Greater Than Past Impeachments

The Bank of Korea has warned that prolonged conflicts related to the impeachment of President Yoon Suk-yeol could have a significant economic impact.

On the 15th, the Bank of Korea released reference materials titled 'Assessment and Response Direction of Financial and Economic Impact Post-Martial Law,' stating that while the overall economic impact was not significant in the previous two impeachment scenarios, the current situation could be different.

In March 2004 and December 2016, when the National Assembly passed the presidential impeachment bills, there was increased volatility in the financial and foreign exchange markets, and consumer sentiment was somewhat dampened. However, the Bank of Korea explained that there was no significant shock in terms of overall economic growth rates. Although the stock market saw a decline in investor sentiment and a drop in stock prices immediately after the impeachment bills were passed, it quickly recovered to previous levels.

The Bank of Korea pointed out that this time is different. They explained, "While both past and present situations have seen increased volatility in the financial and foreign exchange markets and weakened economic sentiment, the current situation is exacerbated by increased uncertainty in the trade environment and intensified global competition."

The Bank of Korea advised that, externally, it is crucial to demonstrate that Korea's economic system is functioning normally. They stated, "Although there are some differences in economic conditions, if major financial and economic policies are carried out smoothly under bipartisan consultation, as in previous cases, it will provide confidence that the economic system operates independently and normally, limiting the impact on the economy."

They added, "The Bank of Korea plans to utilize all available measures in cooperation with the government to prevent increased volatility in the financial and foreign exchange markets."

Hankyung Hankyung.com reporter case@hankyung.com