“South Korea has been sidelined by a financial maelstrom even as it grapples with a political crisis, underscoring the maturity of its markets, underpinned by swift efforts to reassure investors.”, — write: epravda.com.ua
South Korea has been sidelined by a financial maelstrom even as it grapples with a political crisis, underscoring the maturity of its markets, underpinned by swift efforts to reassure investors. This is reported by Bloomberg. Global funds were net buyers of government bonds in December, and the cost of insuring Korea’s debt against a default hit only a four-month high. This shows that investors have retained confidence in the country despite President Yoon Suk-yeol’s attempt to impose martial law. Confidence in Korea is based on the anti-crisis response of the country’s top management, which has received favorable reviews from investors, including Canadian Imperial Bank of Commerce, abrdn Plc and Straits Investment Management. It followed efforts to modernize the country’s market infrastructure to secure a place in FTSE Russell’s bond index for countries such as the US and Germany.Advertisement: Korea’s martial law crisis unfolded overnight and early in the morning financial authorities responded by pledging to support liquidity , to calm investors’ worries. In recent weeks, they have held almost daily meetings to ensure market stability. Data from credit-default swaps suggested investors were less concerned about Korea than the 2016 coup attempt in Turkey that sent sovereign ratings down. While the Korean won suffered the biggest losses among Asian currencies in the final quarter of the year, investors said the decline was due in part to a strong dollar and global trade risks linked to Donald Trump, rather than domestic politics.Advertisement: Finance Ministry cut its growth forecast for 2025, and business confidence suffered the most since the start of the Covid-19 pandemic. Korean stocks were the worst performers in Asia last year as headwinds intensified for the export-reliant nation. We will remind: the Korean one fell to a minimum since 2009 due to the hawkish position of the Fed and political risks. After the declaration of martial law in South Korea, the won (the country’s currency) fell to 1,427.10 per dollar, the lowest level in two years.