September 1, 1997
The morning chatter of sparrows perched on the branches of the cherry blossom tree in the garden stirred Chairman Park Tae-hong from his sleep.
Still dressed in his pajamas, Park Tae-hong propped himself up and glanced at the clock on the nightstand beside his bed. It had just passed 6 a.m.
He threw off the sheets, got out of bed, and shuffled toward the bathroom in his slippers.
A few minutes later, after a light wash, he emerged into the living room. His wife, Mrs. Jo Deok-rye (Madam Jo), dressed in a house dress and watering the plants, looked up and spoke.
"You're up?"
"Yes," he replied, lowering himself onto the leather sofa.
"What's for breakfast?"
Picking up the newspaper from the table, he asked without looking up. Smiling, Mrs. Jo replied.
"You said you wanted something rich and hearty yesterday, so I made loach soup."
"That sounds great. Well done."
"Gunsan-daek is preparing it right now, so just wait a little."
"Alright."
As he unfolded the newspaper in his hand, Chairman Park frowned at the large headline on the front page.
[Government Announces Financial Market Stabilization Measures]
As the exchange rate continues to surge, the government announced that starting today, all individuals and businesses will be completely prohibited from holding or depositing foreign currency for speculative purposes. Additionally, the government will accelerate the liberalization of foreign exchange policies, including broader acceptance of cash loans.
The government also plans to actively intervene in the foreign exchange market, utilizing foreign currency reserves and dollars deposited by the Bank of Korea in local banks to stabilize the exchange rate.
According to the Ministry of Finance and Economy, the recent sharp rise in the exchange rate is driven more by market anxiety than by fundamental economic instability. The Bank of Korea reportedly holds a combined total of $59 billion in foreign currency reserves and deposits in commercial banks.
Furthermore, the government intends to request that major conglomerates, including the top ten chaebols, as well as financial institutions, actively cooperate in stabilizing the foreign exchange market.
"Calling it psychological anxiety... The exchange rate is on the verge of surpassing a thousand won per dollar, and the government still doesn't seem to grasp the seriousness of the situation."
Maybe they did know, but were deliberately hiding it to keep the public calm.
"If word got out that a foreign exchange crisis was imminent, there'd be a mad rush to hoard dollars, and the exchange rate would spike even further."
Of course, the Blue House and the government were likely aware of that. There was no way they could reveal the full truth.
"That's probably why they announced a ban on individuals and companies holding dollars for speculative purposes."
Just from that, it was clear the government was extremely wary of any outflow of U.S. dollars.
"They're obviously trying to prevent a hoarding frenzy, but this seems like a major blunder on the government's part."
It was practically the same as telling the public that the exchange rate could jump even higher. Inevitably, people would rush to exchange their won for even a single extra dollar starting today.
"I thought it was unlikely, but at this rate, the exchange rate might really break through one thousand won per dollar."
Faced with this unfolding situation, Chairman Park Tae-hong once again felt grateful for heeding his second son's advice to convert all their spare funds into dollars.
Had he not done that, he wouldn't be sitting here calmly reading the newspaper at home.
Like the heads of other companies, he would have been stressed to the bone from the banks' relentless loan collection and the daily rise in interest rates.
"That boy... He's smart and has a keen eye for the world—just like me."
Chairman Park Tae-hong chuckled to himself, muttering under his breath with a pleased grin.
Just then, Mrs. Jo Deok-rye came out from the kitchen and noticed her husband laughing to himself, her expression curious.
"What are you mumbling about all alone?"
"Ahem. It's nothing."
Clearing his throat awkwardly, Chairman Park set down the newspaper and casually brought something up.
"I was talking about our second son."
"Seok-won? What about him?"
"People say he takes after me a lot."
"Oh my, who said that?"
Jo Deok-rye scoffed as if the idea was ridiculous.
"Even Chief Gil and the other executives say the same thing."
"If that's their judgment, then their eyes must be broken. Just look at his face—handsome enough to outshine most actors. Obviously, he takes after my side of the family."
At that, Park Tae-hong flared up in protest.
"What are you talking about? When I was young, women were lining up to be with me! Even popular actresses were desperate to have a drink with me!"
The moment he said that, Jo Deok-rye's gaze turned razor-sharp, like a needle.
Planting both hands on her hips, she stared at her husband as if she were interrogating a suspect.
"Oh really? That must've been nice. So which actresses were lining up for you?"
"Uh…"
Realizing he had made a mistake, Park Tae-hong averted her eyes and quickly rose from the sofa.
"Ahem. Would you look at the time? I'd better eat breakfast and head to work."
"So? Which actresses were after you?"
"Oh, come on! That was ages ago. Why dig all that up now? What good would it do you to know?"
Mumbling excuses, Park Tae-hong hurried toward the kitchen like he was fleeing the scene.
***
[USD/KRW: 997.38 (+7.13)]
As Chairman Park Tae-hong had predicted, the foreign exchange market went into a frenzy the moment it opened. The surging exchange rate threw not only the foreign exchange authorities into a panic, but also banks and companies across the board.
At Daeheung Venture Capital's Asset Management Division, things were no different. Everyone watched the screen anxiously as the rate spiked by more than 7 won in a single jump.
"This doesn't look good at all. At this rate, the exchange rate is really going to break a thousand won," muttered Jung Hwan-yeop, leaning back in his chair with both hands behind his head.
Choi Ho-geun, who was standing nearby with his arms crossed and wearing a deep purple tie, responded grimly.
"Considering the momentum, it just might."
"Wouldn't that be a disaster?" asked Hong Jae-hee with visible concern.
Yoo Seok-hyun shook his head with a sigh.
"Just last year, the rate was hovering around 820 won. Who would've thought it'd rise high enough to threaten a thousand?"
Though he didn't say anything, Noh Hee-won's face also reflected deep concern.
"That won't happen."
A voice from behind made everyone turn their heads at once.
Walking into the office with Han Ji-sung at his side was Seok-won, dressed in a perfectly tailored suit that made him look like he stepped out of a fashion magazine.
Jung Hwan-yeop, who had been lounging around like he was in his own living room, jumped to his feet in a panic and bowed.
"P-President, good morning!"
With a calm smile, Seok-won addressed the team.
"Thank you for all your hard work."
Choi Ho-geun gave a slight nod and asked as he looked at Seok-won.
"Did you say the exchange rate won't go over a thousand won?"
"That's right."
"But the dollar buying pressure is so intense that trading was halted as soon as the forex market opened. Do you really think it can hold below a thousand?"
Choi Ho-geun sounded skeptical.
The plunging stock market and surging exchange rate were classic signs of a looming currency crisis, just like what other Asian countries had recently experienced. What worried him even more was something he had heard from Seok-won not long ago.
But Seok-won responded with a calm expression.
"Yesterday, Deputy Prime Minister for Economic Affairs Lee Eun-hyung personally announced the government's financial market stabilization measures. There's no way the government or the Ministry of Finance would sit back and let the psychologically significant one-thousand-won mark be breached the very next day."
"Oh. Now that you mention it, that makes sense," said Jung Hwan-yeop, nodding as if the thought hadn't occurred to him.
"Besides, they publicly declared they would intervene actively to stabilize the exchange rate. I'm sure they'll release some of their dollar reserves to push the rate down."
As he spoke, Seok-won gave a slight shrug.
"Of course, it'll be like putting a band-aid on a bullet wound."
Then, turning to Choi Ho-geun, he asked,
"The KOSPI is crashing too, right?"
Choi Ho-geun nodded grimly.
"Yes. The 550-point level, which we had barely managed to maintain, has collapsed, and even the 500 level is looking unstable now."
Seok-won took the news in stride, his expression unchanged—as if he had expected it all along.
"Foreign investors have been pulling out for a while. And when individual and institutional investors saw yesterday's government announcement didn't contain anything substantial, they started panic-selling too."
"I think you're right," Choi agreed.
"This crash is going to have a deep bottom. Don't even think about jumping in for bargain buys. Just watch the market for now."
Something about Seok-won's tone sounded ominous. Feeling uneasy, Jung Hwan-yeop cautiously asked,
"When you say a deep bottom… how low do you think it's going to get?"
Seok-won raised his eyes and fixed them on the massive market display board on the opposite wall.
"You're going to see numbers we've never experienced before."
"...!"
Jung Hwan-yeop swallowed nervously without realizing it.
As he looked at Seok-won, who was staring at the large market display board, a red warning light seemed to flicker in his mind.
"Is it really that dangerous?"
The other team members were also staring at Seok-won with tense faces.
As the atmosphere became heavy, Seok-won turned to Choi Ho-geun and asked,
"What's the current Malaysia stock futures index?"
Choi Ho-geun checked the monitor on his desk and responded,
"It's dropped to 431 points."
Unlike other countries that had been forced to kneel under the attack of currency speculators and were begging the IMF for bailout loans—except for Hong Kong, which had managed to secure a dramatic victory—Malaysia implemented extreme capital controls. They banned dollar transactions entirely and stopped foreign investment outflows for a set period.
As a result, the ringgit exchange rate and the stock market were completely destroyed, heading into a downward spiral.
"Although this led to a total loss of trust in the international financial market and immense economic pain, it allowed Malaysia to avoid the harsh IMF structural adjustments and market liberalization demands."
Of course, it took Malaysia a significant amount of time and effort to regain trust in the international financial markets, so it was hard to say definitively which path was the better choice.
"Then, that means we have made over 37% profit."
"That's right."
"Since it doesn't look like it can drop much further from here, let's go ahead and close all positions."
"Got it."
Without any further comments, Choi Ho-geun accepted Seok-won's instructions.
"I'll be heading out now. You all take care of things."
As Seok-won left the office with his assistant, Han Ji-sung, Choi Ho-geun and the team members lowered their heads to see him off.
Jung Hwan-yeop, who usually had a relaxed expression, stared at the direction Seok-won had gone with a face void of any smile, then turned his gaze toward Choi Ho-geun.
"Do you think the president believes we might face a currency crisis like the Southeast Asian countries?"
"Ah…"
"You don't think that's possible, do you?"
The team members exchanged uneasy glances after hearing the conversation.
Choi Ho-geun glanced around at his team, his expression becoming tense. In a subdued voice, he responded,
"Hong Kong was attacked by currency speculators too, and there's no reason Korea should be an exception."
Jung's eyes widened momentarily.
Before he could say anything, Choi Ho-geun clapped his hands, as if to break the tension in the room.
"All right, everyone heard what the president said. Let's start clearing out the short positions we've set on the Malaysia stock futures."
"...Yes."
"Understood."
In the midst of the slight chaos, the team members responded and headed to their respective stations.
Jung Hwan-yeop stared at Choi Ho-geun with questioning eyes, wanting to ask more, but eventually bit his lip and went to his desk.
Meanwhile, Choi Ho-geun remained standing, his gaze fixed on the exchange rate between the won and the dollar displayed on the large market board, a complicated expression on his face.