Seoul: The level of political uncertainty in South Korea has returned to levels seen prior to the martial law incident, following the recent presidential election, the central bank said Friday.
According to Yonhap News Agency, data submitted by the Bank of Korea (BOK) to Rep. Cha Gyu-geun of the Rebuilding Korea Party indicates that the political uncertainty index stood at 1.5 as of June 4. This comes after the election in which Democratic Party candidate Lee Jae-myung defeated conservative rival Kim Moon-soo.
The index experienced a dramatic spike, reaching a record high of 12.8 in mid-December, subsequent to former President Yoon Suk Yeol's unexpected declaration of martial law on December 3. Although the index rose slightly above 1 after the election, the BOK has noted that such minor fluctuations are typical during normal times and should not be deemed significant.
The BOK's research department compiles the index by counting the number of media articles that include both the keywords "politics" and "uncertainty" in their headlines or main text. This index reflects relative values, with the long-term average from the beginning of 2000 set at zero.
A previous record high was noted at 8.8 on March 17, 2004, following the passage of the impeachment motion against the late former President Roh Moo-hyun. In addition, the economic uncertainty index also fell to 1.2 as of June 4, closely aligning with the 1.1 recorded on December 3.
The index had increased to 5.4 on January 2 but gradually declined, reaching as low as 0.5 by May 15, as reported by the BOK. BOK Governor Rhee Chang-yong stated at a press briefing last week, "The political uncertainty that has weighed on the economy over the past six months is expected to ease significantly. Political factors are no longer having a meaningful impact on the won-dollar exchange rate."
Earlier this year, the Korean won had weakened sharply, nearing 1,500 won per U.S. dollar due to domestic political turmoil and concerns over sweeping tariff measures under U.S. President Donald Trump's administration. However, it rebounded to its strongest level in about seven months on Thursday, closing at 1,358.4 won per dollar.