BOK chief says Korean won unlikely to return to past levels ‘for some time’ amid political crisis

South Korea’s central bank governor said Tuesday it would be difficult for the Korean won-dollar exchange rate to return to levels seen in the past for the time being amid political turmoil following the short-lived martial law imposition.

Bank of Korea (BOK) Gov. Rhee Chang-yong made the assessment during a meeting with lawmakers of the parliamentary strategy and finance committee in the day as the country is reeling from the aftermath of President Yoon Suk Yeol’s imposition of martial law last Tuesday, which was lifted hours after the National Assembly rejected it.

“It would be difficult (for the won-dollar exchange rate) to return to the levels seen in the past for some time,” Rhee told lawmakers, according to his office.

Following the incident, the Korean won had weakened sharply to below the 1,440 won level, the lowest in more than two years, though it rose 10.1 won from the previous session to be quoted at 1,426.9 won against the U.S. dollar Tuesday.

“It is hard to say that the foreign exchange market has been stabilized, and investors are taking a wait and see posture,” Rhee was quoted as saying by a lawmaker.

Financial authorities have vowed to mobilize all resources available to ease the financial and foreign exchange markets, with Finance Minister Choi Sang-mok saying the current market volatility seemed excessive, given the country’s economic fundamentals.

A parliamentary motion to impeach Yoon failed Saturday after the ruling party boycotted the vote. But the opposition side has vowed to file the same motion against Yoon repeatedly amid nationwide protests demanding Yoon’s resignation.

Extensive investigations are under way into the case. Yoon was placed under a travel ban, becoming the country’s first sitting president to have been banned from traveling abroad.