According to Jin Zhenxu and Cui Zhou, economists at Citigroup, increasing long-term political uncertainty surrounding the impeachment of South Korean President Yoon Seok-yeol may weaken overall economic confidence and discretionary spending.
They noted that if the South Korean legislature fails to pass the 2025 national budget in December, the likelihood of the Bank of Korea making consecutive interest rate cuts in January will increase. They also added that political developments may prompt more capital outflows and bring upward risks to the USD/KRW exchange rate.
