Moody's may up Korea

Moody's Investors Service said it put South Korea's government ratings on review for possible upgrade in light of continued fiscal prudence, favorable macroeconomic prospects and the possibility of a more predictable containment of geopolitical risks.

The action affects the Republic of Korea's A3 government long-term foreign-currency and local-currency ratings, the A1 country ceiling for foreign-currency bonds, the A3 country ceiling for foreign-currency bank deposits and the prime-2 short-term ceiling for bank deposits. The local-currency bond and bank deposit ceilings remain Aaa and Aa1, respectively.

Korea's favorable macroeconomic performance should continue over the near term, Moody's said. Over the longer term, Korea's improved credit fundamentals reflect a renewed commitment to trade liberalization to boost potential economic growth, the agency added.

Current policies, including the lack of significant intervention in the foreign exchange market, will allow a gradual decline in government debt, Moody's added.

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