Seoul: South Korea’s finance ministry announced its intention to closely observe market conditions after Moody’s downgraded the United States’ sovereign credit rating. The global rating agency’s decision to lower the U.S. rating could potentially increase volatility in global financial markets.
According to Yonhap News Agency, this assessment emerged during a meeting of financial authorities led by Deputy Finance Minister Yoon In-dae. The meeting was organized following Moody’s decision to downgrade the U.S. sovereign credit rating from Aaa to Aa1.
Participants in the meeting noted that the downgrade was anticipated, given Moody’s previous ‘negative’ outlook on the U.S. rating. This prior outlook had already signaled potential changes, thereby minimizing the immediate impact on the markets.
The downgrade by Moody’s follows Fitch Ratings’ decision in August 2023 to lower the U.S. rating from AAA to AA+, and a similar downgrade by Standard and Poor’s in 2011. Despite the anticipated nature of Moody’s downgra
de, it is recognized that it could contribute to short-term volatility in financial and foreign exchange markets.
The finance ministry emphasized the importance of cooperation among relevant agencies to monitor and manage market conditions both domestically and internationally. The ongoing U.S. tariff negotiations were also identified as a factor that could influence market stability.