S&P, Moody's, Fitch: "Korea's Credit Rating Stable... No Downside Risk to Economy" (Comprehensive)

Choi Sang-mok, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, is presiding over an emergency macroeconomic and financial issues meeting on the 13th at the Korea Federation of Banks in Jung-gu, Seoul. (Photo by Ministry of Economy and Finance)

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The three major global credit rating agencies?S&P, Moody's, and Fitch?have expressed the view that South Korea's sovereign credit rating remains stable despite the imposition of martial law. On the 13th, the tenth day of the crisis, amid ongoing political turmoil, economic and financial authorities continued their efforts to maintain external credibility and to quell the spread of foreign investor anxiety.

Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, met the day before with senior officials from the global credit rating agencies S&P, Moody's, and Fitch at the Government Seoul Office to explain the recent political situation and the government's response direction.

Attending the meeting were Roberto Saipon-Ar?valo, Global Head of Sovereign Ratings at S&P; Marie Diron, Global Head of Sovereign Ratings at Moody's; and James Longsdon, Global Head of Sovereign Ratings at Fitch.

Deputy Prime Minister Choi emphasized, "Even during the two previous presidential impeachments, the economic impact was limited," and added, "All of South Korea's national systems are operating normally as before." He also requested continued interest and trust in the Korean economy, stating, "We will ensure that foreign investors can continue stable investment and business activities without any issues."

In response, the global credit rating agencies conveyed, according to the Ministry of Economy and Finance, that despite the recent political situation, South Korea's sovereign credit rating remains stable, and they have rather felt the institutional robustness and resilience of Korea. S&P noted, "The most important aspect is that the national system functioned well despite the recent crisis," and added, "The financial authorities' swift market stabilization measures demonstrate how strong Korea's economic system is."

Moody's stated, "We agree that the downside risks to the Korean economy are unlikely to materialize," and said, "Korea's solid rule of law underpins its high sovereign credit rating." Fitch reaffirmed that the current crisis does not pose a threat to Korea's credit rating and highly appreciated the government's efforts to transparently explain the situation, according to the Ministry of Economy and Finance.

Since the declaration and lifting of martial law on the 4th, authorities have held daily 'Emergency Macroeconomic and Financial Issue Meetings' (F4 meetings) to deliver market stabilization messages. Deputy Prime Minister Choi also met on the morning of the same day with Lee Chang-yong, Governor of the Bank of Korea; Kim Byung-hwan, Chairman of the Financial Services Commission; and Lee Bok-hyun, Governor of the Financial Supervisory Service, to discuss responses to the financial and foreign exchange markets.

The economic leaders shared the recognition that uncertainty remains due to the recent situation and agreed that related agencies will closely cooperate to monitor the financial and foreign exchange markets 24 hours a day, continuing market stabilization measures such as unlimited liquidity supply.

With the second impeachment vote against President Yoon Suk-yeol scheduled for the 14th, the economic leaders stated, "We will closely watch the political situation and prepare accordingly, and if excessive volatility occurs, we will promptly implement additional market stabilization measures."

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