Korea's Country Risk Is Lower
The spread between South Korea's foreign exchange equalization bonds and U.S. Treasury bonds has dropped to its lowest level since February 2000. The spread was at 1.67 percent last Thursday, higher than China's 1.25 percent but lower than the 2.23 percent of Malaysia, which has the same "Baa2" credit rating Korea has.Korea's spread was higher than Malaysia's for the 10 months ended in March. "This shows that foreign investors think highly of the Korean economy and its chances for recovery but feel that Malaysia's political unrest and its high reliance on the Japanese economy will hurt it," a Bank of Korea official said.
with the Korea JoongAng Daily
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