Moody’s Links Credit Rating, Nuke Talks

The U.S. credit rating agency Moody’s told the Korean government yesterday that it will be hard for Korea to see further improvement in its sovereign credit rating without any substantial settlement of the North Korean nuclear issue.

“A delegation from Moody’s visiting Korea for an annual conference noted that Korea’s credit rating will not likely be raised in the absence of a solution to the nuclear standoff with North Korea at a preliminary consultation session,” an official from the Ministry of Finance and Economy (MOFE) said. “As North Korea’s counterfeiting details emerge, Moody’s is keeping an eye on the fact that the six-party talks aimed at fixing the nuclear problem didn’t yield any plans to solve the issue and got bogged down,” and added that considering the current mood, it would be difficult for Korea to expect an increase in its sovereign credit rating.

The government decided to hold a preliminary meeting with economic, diplomatic, and security departments led by the MOFE and to set up a defense network to explain effectively to Moody’s about progress made, and Korea’s policy directions regarding, the North Korean nuclear issue on February 13.

The delegation from Moody’s, headed by Thomas Byrne, the firm’s credit rating bureau chief, will visit the MOFE, the Financial Supervisory Commission, the Bank of Korea, the Ministry of Foreign Affairs and Trade, the Ministry of Unification, and the Ministry of National Defense beginning February 15-17.

Hyun-Jin Park witness@donga.com