Fitch cuts S. Korea's credit outlook to 'negative'

(ATTN: ADDS Fitch's comment in last 4 paras)
SEOUL, Nov. 10 (Yonhap) -- International credit appraiser Fitch Ratings said
Monday that it has lowered its outlook for South Korea's sovereign rating from
"stable" to "negative," reflecting the impact of the ongoing global financial
turbulence on its economy.
The downgrade was announced in a special report that reviewed the credit status
of 17 emerging countries, including South Korea, China, Taiwan and Malaysia,
according to the agency.
"The revision to Korea's outlook reflects concerns that the de-leveraging of the
banking system may contribute to an erosion of the sovereign's external credit
strengths, especially if it were accompanied by central bank interventions in the
currency market to support the exchange rate," said James McCormack, head of Asia
sovereigns at Fitch.
However, the agency has affirmed its sovereign rating for South Korea at "A
plus," its fifth-highest grade.
Fitch has retained the current grade for South Korea since it upgraded the rating
a notch from "A" in October 2005. It is still a step lower than the "AA minus"
that the Asian country held just before the financial crisis in the late 1990s.
Fitch noted that the South Korean government had responded "quickly" and "in a
focused manner" to the funding difficulties of the nation's banking system, with
sweeping measures, including a US$30 billion foreign-currency swap facility with
the United States and a $100 billion state guarantee for banks' foreign debts.
kokobj@yna.co.kr
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