September 8, 1997.
Early morning.
While most people were just waking up, Na Un-hak—now in his fourth year as a foreign exchange trader—arrived early at the headquarters in Euljiro 2-ga.
"Korea Exchange Bank: Making Customers' Dreams Come True."
Passing through the lobby where this year's company slogan hung in large letters, he took the elevator up to the fourth floor and stepped onto the trading floor. The staff who had arrived before him greeted him as he walked in.
"Morning, Deputy Na."
"Good morning."
Na Un-hak responded with a casual wave to the voices calling out from here and there.
"Morning, everyone."
He set his briefcase down on his desk and shrugged off his jacket, hanging it over the back of his chair. As he did, Seol Kyung-sik—his junior by a year—poked his head over the low partition between their desks.
"Lovely weather out, but the market's headed the other way."
With a knowing look, he handed over the morning newspaper.
Na Un-hak took the paper, and the bold headline splashed across the front page immediately caught his eye:
[Government Responds Firmly as U.S. Triggers Super 301 Provision]
The talks that had begun under U.S. pressure—complaining that while Korean automakers were raking in massive profits from exports to America, U.S. car imports to Korea remained negligible—had broken down just days ago.
In response, the White House had wasted no time in announcing it would invoke the powerful trade retaliation measure, the Super 301 provision, against Korean auto manufacturers.
"Bet you anything that auto stocks like Hyunwoo Motors are going to get hammered on the market today."
Letting out a heavy sigh, Seol Kyung-sik's prediction hung in the air. Na Un-hak handed the paper back and replied.
"It's not just the stock market—forex is going to be a problem too."
"Right? With all those banks getting their credit ratings slashed, the exchange rate was already shaky. At this rate, do you think the won's really going to break past that 1,000 mark?"
Seol Kyung-sik scratched his head, muttering anxiously.
"The government will do whatever it takes to stop that."
Na Un-hak lifted his head and glanced at the large market board displaying the won-dollar exchange rate.
[USD/KRW: 987.12]
The rate, which had looked ready to break past 990 won per dollar and cross the 1,000 mark, had dipped slightly thanks to aggressive interventions by the government and the Bank of Korea.
Things had just begun to settle down a bit, but with this major blow hitting the market, it was obvious today's exchange rate would swing wildly.
"This mess from the U.S. completely buried the news about Ssangbong Group filing for court receivership."
The Ssangbong Group was a mid-sized conglomerate that had grown big off its underwear business.
Having established a strong presence with its flagship brand Ssangbong and built a solid financial foundation, the group had been considered stable.
But once the reins passed to the second generation, they strayed from their core textile business and tried diversifying—and that's where things went wrong. In the end, they'd been forced to file for court protection.
"How much debt did Ssangbong rack up?"
"The paper says 977 billion won."
At that figure, Na Un-hak's brows knitted together.
"So nearly 1 trillion won. Banks were already struggling after all those other big firms collapsed. If they have to absorb Ssangbong's debt too, that's going to be a huge burden."
"No kidding."
Just then, Lee Eon-su, the head of the Foreign Exchange Department, strode quickly into the office, his face tight with tension.
"Everyone's here, right?"
Sweeping his gaze around the room, he raised his voice with authority.
"As you all know, with Ssangbong's filing and this new shock from the U.S., there's a high chance the exchange rate will spike hard today. The Bank of Korea's opened up a $500 million intervention account, so listen up: if the won-dollar rate crosses 950, start buying won right away and cap it before it runs wild. Everyone clear?"
"Yes, sir!"
"Understood."
Na Un-hak and the other traders replied in unison.
After issuing a few more instructions, Lee Eon-su headed to his desk. Seol Kyung-sik leaned in and whispered, lowering his voice.
"Opening up $500 million right away like that… looks like the Finance Ministry and the Bank of Korea both think the rate's going to go crazy today."
"That just shows how determined they are to keep it from breaking into the 1,000s."
Typing in his personal password, Na Un-hak brought up the trading platform and began preparing for the day's session.
With expectations of a sharp spike in the exchange rate, the trading floor was slowly growing more tense as opening time drew near.
Na Un-hak flexed his fingers lightly and first checked the Sydney forex market, which had already opened.
Apart from the Indonesian rupiah plummeting—this after it secured a $23 billion bailout from the IMF—there wasn't much else standing out yet.
Just then, one of the staff raised his voice to announce the market open.
"The market's live!"
At that shout, the phones began ringing off the hook, and buy and sell orders came pouring in.
Trriiing! Trriiing!
As the desk phone blared, Na Un-hak instinctively reached out to grab the receiver. But the moment his eyes caught the won-dollar rate flashing on his monitor, his entire body froze.
The rate had smashed through the psychological barrier at 1,000 won per dollar, surging upward in an instant.
[USD/KRW: 1,003.21 (+16.09)]
"Wh-what…?"
"What the hell is this!"
"A spike of over 16 won at once? Is this a system glitch or what?"
Everyone had expected heavy selling of the won today, what with the U.S. invoking Super 301 sanctions and Ssangbong Group filing for court receivership.
But this—this violent spike had blown past all their projections. More than anything, the sheer ease with which the psychological line of 1,000 won had crumbled left them stunned and horrified.
Na Un-hak, too, felt as if he'd been struck on the back of the head with a hammer. The color drained from his face as he sat there in a daze.
"!"
Then it hit him—this wasn't the time to be frozen like this. Snapping out of it, Na Un-hak whipped his head around.
Sure enough, his junior, Seol Kyung-sik, was sitting there paralyzed, completely shell-shocked.
Na Un-hak, raising his voice deliberately so the whole floor could hear, barked out sharply.
"The rate's shot past 950! What are you waiting for—start buying now!"
"Y-yes, sir!"
Snapping back to his senses, Seol Kyung-sik hurriedly hammered at his keyboard, placing orders.
Na Un-hak, too, after confirming the flood of sell orders for the won, quickly moved to defend the rate, using the dollars provided by the Bank of Korea to buy back won.
The other traders, regaining their composure, also rushed into action.
"Buying 10 at 3.2!"
"Put me down for 16 at 3.2—buying!"
"Okay—done!"
Dozens of traders, including Na Un-hak, kept their eyes glued to the four monitors at their stations, watching the exchange rate and trading volume flicker by the second, punching in orders with lightning speed.
Tap tap!
Trriiing! Trriiing!
The roar filling the wide trading floor was loud enough to make one's ears ring.
But even as they frantically bought up won, the exchange rate—having already broken past the 1,000 mark—showed no sign of retreating. All they managed was to barely halt its further climb.
Seeing this, Na Un-hak, as he punched in yet another buy order on his keyboard, muttered in frustration.
"Damn it. Why isn't this coming down?!"
At the same time, Daheung Venture Capital, near Yeoksam Station in Gangnam.
[USD/KRW: 1,003.15 (+15.49)]
Seok-won sat with his arms crossed in front of a broad wooden desk, staring at the exchange rate. Though government intervention had managed to slightly trim the surge, it was still hovering above the 1,000-won threshold. He let out a low, rumbling hum.
"So it finally broke 1,000."
Shifting his gaze, he checked the forex trading volumes on the monitor to his left.
Despite the government deploying its reserves to buy up won, sell orders continued to stack up without pause.
Even accounting for the two simultaneous shocks hitting the market, this was an abnormal situation. Seok-won instinctively knew: the speculators had finally launched their assault on the won.
"They're going all in from the start, no holding back."
No doubt, having learned from their failed attack in Hong Kong, they were now aiming to finish this quickly—before the White House could step in again.
"At this rate, Korea's chances of fending this off are getting slimmer by the minute."
Seok-won's lips twisted into a bitter smile as he watched the screen.
He already knew how this would end, but until now, he'd still nursed a faint hope. That, too, he quietly let go of.
Just then, the phone on his desk rang. He immediately reached out and picked up the receiver.
[Boss, the won-dollar rate has broken 1,000!]
"I'm watching it now."
Seok-won's voice was calm as he replied to Choi Ho-geun's urgent report.
"This was expected. No need to be rattled. More importantly, what's the situation in the stock market?"
Choi, his tone a little steadier now, responded.
[Stocks tied to Ssangbong Group and the auto sector—Hyunwoo Motors included—are crashing. The index just broke below 500, marking a five-year low.]
Seok-won moved his mouse and pulled up the KOSPI index chart.
"Both the currency and the stock market are only just starting to feel the shock. Like I told you before, stay cool and monitor things carefully."
As dire as things already looked, it was impossible to guess just how much worse they'd get.
Choi, feeling a chill creep down his spine, swallowed hard without meaning to.
"The Malaysian futures position—that's all liquidated, right?"
Switching topics, Seok-won asked. Choi answered without missing a beat.
[Yes. As I reported earlier, we locked in a 37.6% return. Net profit after expenses is 86.5 million dollars.]
"So adding the principal, that makes it 111.5 million dollars total."
[Correct.]
"Just like the profits we made from the Hong Kong futures last time—have this amount held in the Eldorado Fund account for now."
[Understood.]
After giving a few more necessary instructions and setting the receiver down, his mobile phone buzzed as if it had been waiting for its turn.
"Hello."
[Is this a good time to talk?]
It was Lee Cheol-gyun's deep, weighty voice, as usual. Seok-won leaned back in his chair and asked,
"What is it?"
[In the next two or three days, Hwani Department Store in Gwangju will likely file for court receivership. They won't be able to cover the bills coming due from their banks.]
"...!"
Hwani Department Store—Gwangju's first department store and the region's flagship local business.
"Are you sure about this?"
[Yes. They're carrying debts totaling 112 billion won across Gwangju's primary and secondary financial institutions. But their cash liquidity has completely dried up. They've got over 8 billion won in promissory notes maturing within the week, and there's simply no money to cover them. There's really no other option at this point.]
"A department store that deals in cash sales running out of money… Well, come to think of it, Taehwa Shopping in Busan went bankrupt too. So I guess this isn't all that surprising."
[Internally, they've already made the decision to file for court receivership.]
"Well, if they want to avoid outright bankruptcy, that's their only move. Got it."
[I'll call again if I get any more information.]
"Please do."
After hanging up, Seok-won glanced at the KOSPI chart on his monitor—plummeting straight down like it had fallen off a cliff.
He muttered to himself.
"A long, dark, painful tunnel is just beginning."