The Bank of South Korea (BoK, in English) promised to monitor the effect of political developments and act to maintain the stability of the financial sector, following the impeachment of President Yoon Suk Yeol, in a statement released this Sunday (15). The announcement comes as opposition parties and interim President Han Duck-soo work to ease political turmoil in the country.
According to the BoK, the high volatility in South Korean financial and foreign exchange markets is cooling down and the approval of impeachment should “improve the predictability of the political process”, further reducing volatility.
Political crisis
The central bank’s projection is based on the two previous periods of impeachment in the country, which had “limited impacts despite political uncertainty”.
“If the duration of the political conflict lasts longer than in previous cases, the economic impact may increase and the BoK plans to act proactively, using all available measures in collaboration with the government,” the monetary authority said in a note.
The announcement comes amid attempts by South Korean political leaders to ease tensions, combining efforts between the government base and opposition parties. Liberal Democratic Party (LDP) leader Lee Jae-myung proposed that the National Assembly work together with parliament through a “special council” and said he will not seek the impeachment of Prime Minister Han Duck- soo, who will serve as interim president and who was appointed by Yoon to the position.
New elections
Lee also called on the Constitutional Court to quickly decide on impeachment, which has 180 days to determine Yoon’s full removal from office. If impeachment is confirmed, new national elections in South Korea should take place within 60 days.
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Acting President Han said he intends to cooperate and maintain close communication with the National Assembly, but did not comment on the intention to create a council uniting both parties. Leader of the ruling People’s Power Party (PPP), Kweon Seong-dong, criticized Lee’s suggestion and said it was “not right” for the opposition to act as if it led the government, asserting that the PPP will take responsibility for the government “until the end of Yoon’s term.”
*With information from the Associated Press
