Financial markets all over the world including both developed states such as the US and developing states are at precarious status affected by the international financial crisis. Korean economy cannot avoid the wave from international financial crisis. In these external conditions, Korean foreign currency market and financial market seem relatively more seriously unstable compared to not only the developed states but even to its competitors, East Asian states. This research analyzes the various causes of instability such as restraint on overseas loan, current account deficits, capital account deficits, unstable foreign loan structure, low Korea’s credit fundamentals and potential insolvent operation factors. In conclusion, it is important to keep positive current balance, increase foreign exchange reserve, cut down short-term foreign loan and reduce potential insolvent factors in order to stabilize foreign currency market and financial market of Korea.