Moody's Investor Service, an international credit rating agency, Friday retained South Korea’s sovereign credit rating of "Aa3."
"Korea demonstrates strong fiscal fundamentals, as reflected in consistent budget surpluses, a moderate debt burden, one of the lowest gross financing needs of rated sovereigns, and low foreign-currency and external debt," Moody's said in a press release.
"Further supporting Korea's rating are the reduced external vulnerability of the banking sector, the resiliency of the economy to global shocks; the competitiveness of Korea's export industries and the continuation of the status-quo in Korean peninsula geopolitics," it said.
Moody's, however, remained cautious over public and household debt problems facing the country.
"There are two prominent rating constraints," the agency said, pointing out ”the sharp rise in public sector, non-financial corporation debt“ and ”relatively elevated household debt, which magnifies the vulnerability of consumption expenditure and economic growth to an interest rate shock.“
