Moody's Maintains Credit Rating for Korea
Moody's decided to maintain Korea's credit rating at Aa2 on Wednesday.
Aa2 is the third-highest ranking after Aaa and Aa1 on the global rating agency's 21-level rating scale. Moody's has maintained Korea's rating at Aa2 -- its highest level ever -- since December 2015, when it was raised from Aa3.
"Uncertainty over the potential for military conflict on the Korean Peninsula is rising with the increasingly strident rhetoric," but its impact on the economy and financial markets appears to be limited, Moody's said.
"Korea's credit profile is supported by the country's very high economic strength, which is reflected in relatively robust growth and high competitiveness," it said. "A very strong institutional framework also underpins the rating, bolstering resilience to potential economic and financial stability risks."
Moody's forecast Korea would grow at a robust 2-3 percent per year over the next five years.
But it also warned of possible downside amid the recent North Korean provocations, saying "a military confrontation would have significant negative credit implications."
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