War, weak growth, and policy uncertainty around Trump’s return already threaten the Korean economy. An extended political crisis will make things worse.

Economists say there are worries that the Trump administration will introduce trade policies against South Korea too, after Asia's fourth-largest economy earned a record-high surplus of $55.7 billion in trade with the U.S. in 2024, up 25.4% from 2023.

The high dollar and expensive U.S. stocks offer a chance to investors to buy cheap overseas assets as the risk of a bond market upset rises

South Korea experienced presidential impeachments and a tragic plane crash. But the Kospi index is now higher than it was a month ago.

Despite mounting woes leading to weak growth momentum, South Korea's central bank kept its benchmark interest rate frozen Thursday in the wake of the weak local currency and uncertainties stemming from the new Donald Trump administration.

The surprise decision came as South Korea's trade-dependent economy faces challenges from weakening export growth and a sluggish recovery in domestic demand, partly hindered by political turmoil following impeached President Yoon Suk Yeol's short-lived declaration of martial law in December.

A World Bank report last week highlighted that risks to the regional outlook remain tilted to the downside, primarily due to global policy shifts and trade policies in particular. It projected growth for East Asia and Pacific to decelerate to 4.6% in 2025 and to 4.1% in 2026, from 4.9% in 2024.

Asia’s fourth-largest economy is facing these problems as it navigates twin political shocks: Donald Trump’s re-election in the US and the fallout from South Korean President Yoon Suk Yeol’s failed attempt to impose martial law.

Explore what to expect with the KOSPI 200 index after the latest Bank of Korea interest rate decision in which officials left rates intact

South Korea's central bank Thursday held its benchmark policy rate at 3% in a surprise move, having delivered two back-to-back cuts in its previous meetings amid a slowing economy. Economists polled by Reuters had estimated a 25-basis-point cut.

Asian stocks climbed following a tepid US session as traders awaited key inflation data that may shed light on the path of Federal Reserve rates over the coming months.

The BoK's choice to hold rates steady appears to be an effort to stabilize the South Korean won, which has recently plummeted to a 15-year low against the U.S. dollar, exacerbating economic uncertainties.