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N. Korean risks not high enough to change ratings on S. Korea: S&P official

2017/09/14 10:31

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SEOUL, Sept. 14 (Yonhap) -- Recently escalating tensions stemming from a raft of provocations by North Korea are not high enough to adjust ratings on South Korea, a senior official of the global rating agency Standard & Poor's said Thursday.

"As long as there is no actual war outbreak, I think the impact is relatively limited, and that's why we don't change our outlook on the rating of South Korea," Kim Eng Tan, senior director of Asia-Pacific sovereign ratings at S&P, said in a brief interview with Yonhap News Agency.

Last month, S&P reaffirmed its long-term sovereign rating on South Korea at "AA," and maintained its outlook at "stable," despite heightened tensions on the Korean Peninsula over North Korea's missile and nuclear programs.

Last year, S&P upgraded South Korea's sovereign rating to a record high, the third-highest grade in the company's evaluation scheme.

Tan said a stable outlook means that S&P does not expect to downgrade South Korea's rating in one to two years.

He said the rating may be affected in case of an outbreak of a big conflict.

Kim, however, said he doesn't think the South Korean government will allow a war to break out on the peninsula unless it is pushed to very strongly by developments or provocations by North Korea.

"There's always the risk of unexpected developments that may push or force the South Korean government to allow conflicts to happen, but at this point in time, we don't think the risks are that high -- at least not high enough for us to reflect it in our ratings," he said.

Tensions have spiked on the Korean Peninsula in recent months as North Korea has fired intercontinental ballistic missiles and carried out its sixth and most powerful nuclear test.