South Korean won hits 15-year low – what it means for 'Korea discount'
After Yoon Suk Yeol's failure to declare martial law, South Korean markets are reeling, with the won nearing its weakest since 2009. Will this worsen the Korea discount?

South Korean president Yoon Suk Yeol has been suspended following an impeachment vote in parliament. The move follows Yoon’s decision to declare martial law earlier this month in a bid to end the grinding political deadlock in Asia’s fourth-biggest economy. Yoon’s attempt to use the army to seize power failed and he now faces allegations of high treason.
Even before that saga, the economy was looking “grim”, says Daisuke Wakabayashi in The New York Times. The local Kospi share index is down 6.5% this year and has been one of the world’s worst performers. The won has underperformed other currencies in Asia, hitting its lowest level since March 2009 on 19 December, after the Federal Reserve announced an interest rate cut, say Jihoon Lee and Yena Park in Reuters. Korea is also highly dependent on exports – it recently started selling more to the US than China for the first time in more than two decades – leaving it vulnerable to Donald Trump’s tariff plans.
There was a “dramatic” market reaction to Yoon’s shenanigans, says Lex in the Financial Times. The won hit a two-year low against the US dollar, equities sold off and sovereign credit default swap premiums spiked.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The coup’s swift failure restored market calm and the Kospi climbed back to where it was on the eve of Yoon’s martial law declaration. But the “stunning abruptness” of the chaos has left investors on edge, and a “drawn-out political struggle” probably lies ahead. Expect Korean stocks to remain under pressure for some time.
What does this mean for South Korea's economy?
Yoon was elected in 2022 promising economic “renewal” and a “deregulatory big bang”, says William Pesek in Barron’s. He has lobbied hard for index compiler MSCI to upgrade his country from emerging-market to developed-market status.
Investors hoped he might end the long-standing “Korea discount”, which sees local shares trade at lower valuations than those in comparable countries. Yet Yoon’s gambit has undone those efforts, making his country resemble “a frontier market hellscape”. The chaos has only vindicated critics who say the Kospi still isn’t ready for “global prime time”.
Of course, political chaos isn’t rare these days even in developed economies. A more prosaic factor causes the Korea discount, says Anshuman Daga for Breakingviews. In Korea, a director’s “fiduciary duty is to the company, rather than to those that own its stock”. The resulting dearth of “shareholder protections” makes Korea an unattractive place to invest.
Yoon had sought to address the problem with his “corporate value-up” policy initiative. Yet so far just 12% of Kospi firms have announced plans to improve shareholder value under the programme.
South Korea has also been the “ultimate exemplar” of prosperity built on US-backed globalisation, says John Authers on Bloomberg. As Pax Americana weakens, once “stable and healthy democracies” from Europe to Asia are coming under strain.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Two thirds of easy access savings accounts come with restrictions – can you access your savings in an emergency?
Out of the top 30 easy access savings on the market, 22 come with some sort of restriction on how fast you can access your money, according to new research.
-
Most popular London boroughs: Full list of in-demand places to move to
A deluge of people move to or within Britain’s capital each year – but which area is the most popular? We look at the most in-demand London boroughs in 2025.
-
David Ellison: America's new media mogul
David Ellison is building a mighty new force in old and new media. Critics worry that he will prove to be a Trumpian patsy. Is that fair?
-
Global investors have overlooked some of China’s best growth stocks
Opinion Dale Nicholls, portfolio manager, Fidelity China Special Situations, highlights three Chinese businesses where he’d put his money
-
How Next defied the odds and positioned itself as a British high-street staple
Next rose from a near-death experience and now thrives as a high-street staple. What's driving its success – and should you invest in the retailer?
-
Alok Sama on AI and how to invest in the future of technology
Interview Alok Sama, the former president and chief financial officer of Masayoshi Son’s investment vehicle SoftBank Group International, explains AI’s potential
-
The private equity puzzle
Listed private equity trusts still trade at large discounts, despite sales that validate their valuations
-
Why investors should avoid market monomania
Opinion Today’s overwhelming focus on US markets leaves investors guessing about opportunities and risks elsewhere
-
Can Rachel Reeves save the City?
Opinion Chancellor Rachel Reeves is mulling a tax cut, which would be welcome – but it’s nowhere near enough, says Matthew Lynn
-
Pierre-Édouard Stérin wants to make France great again
Conservative billionaire Pierre-Édouard Stérin is seeking to lead a political and spiritual renaissance across the Channel. The planning looks meticulous