BOK Governor's Warning on Political Turmoil

Bank of Korea Governor Rhee Chang-yong has issued a stark warning regarding the potential economic repercussions of ongoing political instability. On December 30, Rhee emphasized that the current situation could severely impact external credibility and, in turn, destabilize the overall economy.

Increased Market Volatility

Rhee highlighted the increased volatility in the financial and foreign exchange markets following the National Assembly's impeachment motion against Prime Minister Han Duck-soo. He stressed the importance of stabilizing the domestic political situation swiftly to prevent further economic shocks.

Changes in F4 Meeting Dynamics

The recent F4 meeting, chaired by Governor Rhee due to Acting President Choi Sang-mok's unavailability, has raised questions about the meeting's future format. The shift in leadership roles has led to ambiguities in the traditionally equal standing of economic authorities' heads during these meetings.

Global Economic Pressures

Amidst these domestic challenges, Korea also faces external economic pressures. The Bank of Korea predicts limited interest rate cuts by the U.S. Federal Reserve and a potential freeze in policy rates, influenced by the Trump administration's policies. These factors could exacerbate the won-dollar exchange rate volatility, further complicating Korea's economic outlook.