Seoul: Global credit appraisers have stated that the sweeping tariffs imposed by U.S. President Donald Trump's administration, along with the political chaos following the now-suspended President Yoon Suk Yeol's declaration of martial law, are not expected to impact South Korea's sovereign credit rating. This assessment comes from meetings held by Choi Jong-ku, South Korea's ambassador-at-large for international financial cooperation, with officials from Moody's Investors Service, Fitch Ratings, and Standard and Poor's Global Ratings in Hong Kong and Singapore last week.
According to Yonhap News Agency, the Ministry of Economy and Finance reported that Choi provided explanations regarding the current domestic political circumstances, emphasizing that political uncertainties have been resolved in accordance with South Korea's constitutional and legal systems. The ministry noted that global agencies recognize South Korea's situation as distinct from other nations that have experienced downgrades in their sovereign rating due to political impasses and financial difficulties.
The ministry further explained that while the U.S. tariffs and demands for increased defense contributions will have some impact on the Korean economy, they are not factors significant enough to necessitate a sovereign rating adjustment. President Yoon's declaration of martial law on December 3 caused political turmoil and affected the foreign exchange and stock markets, leading to a vote by the National Assembly to impeach him, pending a Constitutional Court ruling.
In a bid to reassure investors about South Korea's strong economic and financial fundamentals amid the political chaos, Choi conducted an investor relations session in Singapore on Thursday. This session was attended by senior officials from major investment firms, including BlackRock and Pimco. Additionally, Choi engaged in discussions with a senior official from HSBC Holdings, and the ministry indicated that he plans to meet with investors and officials from global financial institutions in New York and London in the coming weeks.
Earlier this month, Fitch reaffirmed South Korea's sovereign rating at "AA-" with a stable outlook, underscoring the country's resilient economic position despite recent political challenges.