Here's some good news for those travelling to South Korea for holiday — the won has dropped to a historic low against the Singapore dollar following the South Korean ruling party's recent electoral defeat.

The exchange rate hit S$1 to ₩1016 as of Apr. 12 morning.

This equalled the previous low seen in late October 2022.

For context, the rate at the start of January 2024 was S$1 to ₩980.

Election result a major blow for South Korea's President

This follows a landslide victory in Apr. 10's parliamentary elections by the liberal Democratic Party (DP) over the ruling People Power Party (PPP), a major blow for conservative President Yoon Suk Yeol.

Yoon is currently two years into his five-year term.

The Prime Minister of South Korea, Han Duck Soo, offered to resign following the crushing defeat, while the leader of the PPP and other presidential aides have tendered their resignations as well.

This defeat will make it more difficult for Yoon to pass legislation that his opponents do not support, with some analysts saying he is "likely to become a lame duck leader", The Guardian reported.

It is also expected to stall the government's policy agenda, including anticipated measures for tax relief and regulatory easing, The Korea Times reported.

Share prices of companies previously identified to benefit from upcoming government initiatives took a tumble on Apr. 11.

This was compounded by inflationary pressure from the U.S. dollar.

Impact of elections setback will be short-lived: Investors

Nevertheless, investors predict that the impact of the setback for Yoon’s party in parliamentary elections will be short-lived, BNN Bloomberg reported.

South Korean stocks made a recovery on Apr. 10 after experiencing a decline due to market jitters over the vote.

Some analysts believe that election-related uncertainties will fade soon.

Others predict that the government initiatives to fix Korea’s company valuations may see continuity due to bipartisan support.

Top image from Google / Unsplash