À̹ÌÁö È®´ë Moody¡¯s Investors Service on Tuesday affirmed its sovereign debt rating on South Korea at ¡°Aa2¡± with stable outlook, citing the country¡¯s strong governance during the coronavirus crisis and robust fiscal position.
The global rating agency has kept its rating on Asia`s fourth-largest economy at Aa2, the third-highest level on the company`s table, since 2015. The countries enjoying the same rating are France and the UK.
Korea¡¯s main Kospi finished Wednesday 0.95 percent higher at 1,940.42. The Korean won rose 0.02 percent, or 0.20, against the U.S. dollar to 1,223.80.
The assessment was based on ¡°Korea`s strong governance and effective macroeconomic, fiscal and monetary management of shocks, as illustrated during the coronavirus outbreak,¡± Moody¡¯s said in a report.
It showed confidence in the country¡¯s executive and policy institutions, saying they have a ¡°track record of effective responses that preserve robust growth potential and sound public finances¡± that is likely to be maintained in the current and potential future shocks.
À̹ÌÁö È®´ë Still, Korea faced a number of risks. ¡°For Korea, the main channels of exposure stem from its reliance on export-oriented manufacturing, its participation in regionally dispersed supply chains and the consequent spillovers to domestic consumption and investment,¡± Moody¡¯s said.
But it expected the damage to the Korean economy to be contained and the government`s fiscal and debt position to not weaken materially compared to similarly-rated sovereigns.
Korea¡¯s rapidly aging society was a long-term risk, it noted, but added that for now it poses a similar or less threat to the economy compared with other advanced economies. The stalled peace process between South and North Korea also remains a lingering geopolitical risk.
Other international rating agencies have also maintained sound ratings on Korea, with Fitch Ratings holding its rating at AA- and S&P at AA.
By Kim Hyo-jin
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]