South Korea upgraded to Aa3 by Moody’s

Amid the recent downgrades to European sovereign credits, South Korea’s resilience to global headwinds is allowing Asia’s fourth biggest economy to defy the trend. Yesterday, Moody’s Investors Service upgraded the country’s government bond rating one notch to Aa3 from A1, with a stable outlook.

The agency justified its action by pointing to Korea’s strong fiscal position, its economic strength, a decline in its banking sector’s external vulnerability, and the fact that there has been no worsening of political tensions with North Korea. It now rates South Korea's sovereign risk the same as that of China and Japan.

“The government's balance sheet has been relatively unscathed by the...