By Kim Young-gyo
HONG KONG, Dec. 12 (Yonhap) -- The impact from North Korea's rocket launch on South Korea's sovereign ratings will be limited, a global credit rating agency said Wednesday, playing down the possible repercussions of the event on the South Korean economy.
"Standard & Poor's (S&P) does not expect Wednesday's rocket launch by North Korea to exert a material negative impact on the sovereign ratings. We believe developments following the launch will not raise geopolitical risks on the Korean Peninsula on a prolonged basis. We also view the negative economic impact on South Korea to be modest and temporary," S&P said in a statement.
The rating appraiser, however, added that the launch is an indication of the geopolitical risks that it considers in the credit factors affecting the creditworthiness of the South Korean government.
"The risks partly offset the relatively strong fiscal, economic and external metrics that support the credit ratings," it said.
North Korea launched a long-range rocket at 9:51 a.m. local time, going ahead with its original plan to send it into space between Dec. 10 and 22. Many North Korean experts had expected the secretive regime would delay the launch for a few weeks.
The rocket launch was made in defiance of the international community's criticism. Seoul, Washington and many other countries regard it as a cover for the test of a long-range ballistic missile.
Earlier in September, S&P upgraded its sovereign ratings on South Korea by one notch to A plus, the fifth-highest level on its 22-level rating scale, citing eased geopolitical risks from North Korea.
South Korea's sovereign credit ratings then recovered to the levels seen before the 1997-98 financial crisis, as S&P joined the other two major agencies in raising the grade on Asia's fourth-largest economy.
Moody's and Fitch hold their ratings on South Korea at Aa3 and Aa-, based on their positive assessment on the improved fiscal health of the country.
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