South Korea’s Constitutional Court on Friday upheld the impeachment of President Yoon Suk Yeol, officially removing him from office and setting in motion a 60-day countdown to a new presidential election.
The decision followed months of political turmoil sparked by Yoon’s controversial declaration of martial law late last year.
Acting Chief Justice Moon Hyung-bae, delivering the verdict in a nationally televised address, confirmed that the court had reached a unanimous decision.
He stated that Yoon’s declaration of martial law on December 3 did not meet the constitutional requirement of a national crisis.
Moreover, the use of military force to block parliamentary action was a direct violation of South Korean law.
“The deployment of troops to the National Assembly was a grave overreach of executive power,” Moon said, according to a translation by Yonhap News Agency.
Martial law and its fallout
Yoon’s surprise declaration of martial law—the first in over four decades—was delivered during a late-night broadcast, where he claimed the country faced threats from “North Korean communist forces” and “anti-state elements.”
The move sparked immediate backlash, with lawmakers swiftly rejecting the decree and initiating impeachment proceedings just days later.
Parliament voted to impeach Yoon on December 14, leading to his suspension.
Friday’s court ruling finalizes the process, marking only the second time in the country’s democratic history that a president has been formally removed from office.
In the interim, Prime Minister Han Duck-soo has been reinstated as acting president, following an earlier court directive on March 24.
Markets respond to political turbulence
Financial markets reacted swiftly to the court’s decision.
South Korea’s Kospi index closed down 1.66%, while the smaller Kosdaq dropped 0.85%.
In contrast, the South Korean won strengthened about 1% against the US dollar.
Finance Minister Choo Kyung-ho convened an emergency meeting alongside central bank chief Rhee Chang-yong and other top regulators to assess the fallout on the nation’s financial and real economy.
Economists noted that while the ruling adds political clarity, markets remain unsettled by global trade concerns and upcoming political transitions.
Investors eye election and policy direction
The court’s decision shifts attention to the upcoming presidential election, expected to be held in early June.
Opposition leader Lee Jae-myung is widely regarded as the leading contender, though formal candidacies have yet to be declared.
“The verdict restores a degree of certainty in governance, but markets are still digesting the broader geopolitical headwinds,” said Homin Lee, senior macro strategist at Lombard Odier.
Trump’s reciprocal tariffs are still casting a shadow.
Lee said he has a “neutral” call on South Korea, noting that “uncertainties on trade are balanced by the return of normal politics and undemanding asset valuations.”
Policy outlook remains uncertain
Min Joo Kang, ING’s senior economist for South Korea and Japan, warned that political divisions and fiscal delays could dampen economic growth in the short term.
She noted that criminal proceedings against Yoon remain active and could influence the presidential campaign.
“Yoon’s criminal charges are separate from his impeachment. As such, the political noise surrounding it will linger throughout the presidential campaign, further dividing the country,” she said, adding that markets will quickly shift focus to the election in June.
Kang also said there is much uncertainty about the presidential candidates and their policies.
According to Kang, a DP victory could usher in an expansive fiscal approach, with a proposed 35 trillion won budget and a likely boost in welfare and public investment.
In contrast, the PPP is calling for a more modest 15 trillion won spending package, though both parties are expected to maintain an easing stance overall.
“However, political gridlock will make it difficult for the government to pursue its policy agenda. In any case, the overall impact on growth this year should be weaker than we initially expected,” she said.
The upcoming weeks are expected to bring further clarity on candidates and campaign platforms.
Until then, investors and analysts alike will be navigating a complex landscape shaped by both domestic politics and external economic pressures.
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