TechFlow news, on December 4, Citigroup Research analysts said in a report that the negative impact of South Korea's sudden martial law declaration on the economy and financial markets is likely to be short-term.
Although capital outflow pressures will rise and pose upside risks to the dollar-won exchange rate—especially given recent position reductions—the uncertainty surrounding the political and economic environment could be swiftly alleviated by the central bank and policymakers' "proactive policy response." For instance, South Korea's finance minister has pledged to provide unlimited liquidity when necessary to stabilize financial markets.
Citigroup added that once the situation is resolved, policymakers may increase fiscal support, although this implies higher spending over the longer term. (Jinshi)
