Home > Business > Finance

Korea’s credit rating holds steady despite political unrest

Published: 13 Dec. 2024, 09:40 Updated: 13 Dec. 2024, 13:44

Finance Minister Choi Sang-mok speaks during virtual meetings with global credit appraisers at his office in Seoul on Friday. [MINISTRY OF ECONOMY AND FINANCE]

The three major global credit appraisers shared a common view Friday that Korea's credit rating remains stable despite the recent political turmoil, the Ministry of Economy and Finance said.

The three credit appraisers — Moody's Ratings, Fitch Ratings and Standard & Poor's Global Ratings (S&P) — made the assessment during separate virtual meetings with Finance Minister Choi Sang-mok on the day, according to the finance ministry.

The meetings came about a week after President Yoon Suk Yeol's short-lived declaration of martial law.

During the meetings, Choi emphasized that Korea's government systems, including its market system and crisis management mechanisms, are functioning normally, also stressing that previous presidential impeachments have had only a limited impact on the economy.

Choi added that the government will continue to maintain stable communication and cooperation with the National Assembly on economy-related agendas despite the political unrest.

The opposition-controlled parliament is set to vote on a second motion to impeach the president on Saturday. The first impeachment motion was scrapped last week due to a lack of quorum.

The finance minister said Seoul would do its utmost to ensure normal investment and business activities for all economic participants, including foreign investors, asking the credit appraisers to maintain their attention to and confidence in the country's economy.

He further highlighted that Korea is implementing key economic and industrial policies, including those supporting the semiconductor, AI, shipbuilding and aviation industries, without any disruption.

In response, Roberto Sifon-Arevalo, a managing director at S&P, was quoted by the ministry as saying that it was notable how Korea's government system continued to function despite the situation.

He added that follow-up measures by financial authorities reflected the stability of the country's market system.

Marie Diron, a managing director at Moody's, noted while the company is closely monitoring political developments in Korea, the government's proactive communication with global investors would positively influence the country's credit rating.

Diron emphasized that Korea's solid rule-based system underpins its strong credit rating as well, according to the ministry.

James Longsdon, the global head of sovereigns at Fitch, said the recent political situation does not pose a threat to Korea's credit rating and praised the government for its transparent efforts to explain the situation, the ministry said.

Yonhap