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S&P Global: Brief Martial Law of S Korea Unlikely to Trigger Rating Tweak
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The negative impact of South Korea's brief period of martial law, before return to relative stability, is unlikely to lead to a change in the country's “AA” sovereign rating in the next year or two, opined S&P Global in its report. Political developments that night undermined investors' perception of South Korea's political stability, according to the report. However, the revocation of the martial law after only about six hours in effect and the return to relative stability without violence reflected the fact that South Korea's political system of checks and balances is working well. This was believed to have helped mitigate the damage to investor confidence. S&P noted that it may take some time for investor confidence to return to normal, and it will take time to determine the extent of the impact on economic, fiscal and financial metrics. This will largely depend on how the South Korean political system responds in terms of reassuring investors, thereby reducing the risk premium that investors may apply to decisions involving South Korea. AAStocks Financial News |
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