The South Korean won saw its sharpest drop among major currencies last week, as martial law and impeachment proceedings against President Yoon Suk-yeol deepened political uncertainty. Over the three days following the declaration of martial law (Dec. 4–6), the stock market lost around 71 trillion won ($49.9 billion) in value.
By Dec. 6, the won weakened to 1,419.2 per U.S. dollar, up 24.5 won from the previous week’s close. In overnight trading that ended at 2 a.m. on Dec. 7, it climbed further to 1,423 won per dollar, hitting its highest level in over two years and two months since Oct. 2022.
The won was the weakest performer among major currencies last week. Against the dollar, the euro edged up 0.03%, the Japanese yen rose 0.10%, the British pound gained 0.26%, and the Taiwanese dollar strengthened 0.51%. In contrast, the won dropped 1.86%, while the Chinese yuan and the Australian dollar fell 0.36% and 1.32%, respectively. Among these movements, the won’s decline stood out as the steepest, reflecting heightened pressure from domestic political and economic uncertainties.
Moon Jeong-hee, an economist at KB Kookmin Bank, attributed the slide to a combination of external and domestic factors. “Since November, concerns over President Trump’s tariff policies and a slowdown in the semiconductor market have led to a stronger dollar and weaker won. Also, the political uncertainties brought on by martial law and impeachment proceedings have further weighed on the won,” Moon said.
S. Korea’s stock market fell to levels not seen since the “Black Monday” sell-off earlier this year. On Dec. 6, the KOSPI closed at 2,428.16, dropping below the 2,441.55 level recorded on Aug. 5, the day of the market’s sharpest one-day drop in August. The downturn extended to the KOSDAQ, which sank to its lowest point of the year, deepening concerns about the broader market’s stability.
In just three days after the martial law announcement, the KOSPI lost 57 trillion won ($39.9 billion), and the KOSDAQ dropped $9.8 billion—a combined loss equivalent to the market value of Hyundai Motor. This steep decline was driven in part by foreign investors, who sold off more than $700 million in KOSPI stocks during the same period.
As the domestic market reeled, nearly one-third of all listed stocks—953 in total—hit 52-week lows. Shares tied to government-backed projects, including the “Great Whale” initiative and S. Korea’s export of new nuclear power plants to the Czech Republic, also fell to year-lows.
