September 26, 2017 12:34
The credit ratings firm Fitch sent a representative to South Korea on Monday for three days of talks with government officials about the country's credit valuation.
The talks are usually held before the firm assesses the sovereign credit rating of a country but this time seem aimed at assessing the risk of escalating tensions between North Korea and the U.S.
A Fitch representative is scheduled to visit the Unification Ministry, which oversees affairs related to North Korea, whereas normally staff would meet with officials from the Ministry of Strategy and Finance, Financial Supervisory Service and Bank of Korea.
Government officials said they worry about Fitch's track record of rather strict ratings of South Korea. Unlike S&P and Moody's, which gave South Korea their third-highest ratings, Fitch only gave it the fourth-highest of AA-. Early this month, Moody's raised its assessment of the possibility of a military clash on the Korean peninsula from "very low" to "low."
The government is rolling up its sleeves to prevent a downgrading. Finance Minister Kim Dong-yeon visited S&P's headquarters during his U.S. trip last week and explained the South Korean government's response to North Korean provocations.
The last time a South Korean finance minister visited a global credit rating firm's office in New York was back in 2004.
Hwang Geon-il at the Strategy and Finance Ministry said, "The chances of the North Korean nuclear threat affecting South Korea's sovereign credit rating is low, but we're constantly talking to the rating firms to maintain investor confidence."
Although they bill themselves as "agencies," ratings firms are private businesses that have parlayed their opinions to near-canonical status.
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