The Bank of Korea (BOK) pledged Wednesday to take a variety of steps to keep financial markets stable after the nation’s president declared — and then rescinded — martial law hours earlier.
The BOK will increase short-term liquidity and take “active” steps in currency markets as needed to ensure stability, it said in a statement following a hastily-called board meeting.
The announcement came after President Yoon Suk Yeol rescinded his martial law decree amid a fierce public backlash and after a rare unanimous vote in parliament calling for it to end.
Yoon’s political gamble stunned the nation, lawmakers and investors, leading to declines in the nation’s asset prices overnight. The won plunged and Korea ETFs dropped sharply as investors moved to price in the uncertainty.
Some of those moves were retraced Wednesday morning, with the currency erasing most losses. Stocks and bonds fell.
Finance Minister Choi Sang-Mok earlier Wednesday announced that the government would use all available measures to stabilise financial and foreign exchange markets, with “unlimited liquidity” on the table.
