S. Korea vows to closely monitor market following U.S. credit rating downgrade

SEOUL, May 19 (Yonhap) -- South Korea's finance ministry said Monday the recent downgrade of the United States' sovereign credit rating by global rating agency Moody's could increase volatility in global markets and it will closely monitor market conditions.

The assessment was made during a meeting of financial authorities, presided over by Deputy Finance Minister Yoon In-dae, which was convened after Moody's downgraded the U.S. sovereign credit rating by one notch from Aaa to Aa1 on Friday (U.S. time).

"Participants assessed that the downgrade is expected to have a limited impact on the market, as Moody's had previously maintained a 'negative' outlook on the U.S. rating, making the downgrade a somewhat expected move," the ministry said in a release.

Previously, Fitch Ratings downgraded the U.S. sovereign credit rating from AAA to AA+ in Aug. 2023, while Standard & Poor's made the same adjustment in 2011.

"But the downgrade, along with such existing external uncertainties as U.S. tariff negotiations, could lead to increased short-term volatility in the financial and foreign exchange markets. We will closely monitor financial and foreign exchange markets at home and abroad in close cooperation among relevant agencies," it added.

graceoh@yna.co.kr
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