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The rise of Korea’s credit ratings after the Asian currency crisis : A panel analysis of determinants

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  • The rise of Korea’s credit ratings after the Asian currency crisis
  • Huh, In; An, Jiyoun; Yang, Dayoung
  • Korea Institute for International Economic Policy


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Title The rise of Korea’s credit ratings after the Asian currency crisis
Similar Titles
Sub Title

A panel analysis of determinants

Material Type Reports
Author(English)

Huh, In; An, Jiyoun; Yang, Dayoung

Publisher

[Seoul] : Korea Institute for International Economic Policy

Date 2013-10
Journal Title; Vol./Issue World Economy Update:vol.3(no. 45)
Pages 5
Subject Country Asia & Pacific(Asia and Pacific)
South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Financial Policy
Holding Korea Institute for International Economic Policy
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Abstract

The fluctuations of credit ratings can make a considerable impact on a nation’s finance and economy. Moody’s 9-notch downgrading of the Korea’s credit rating from A1 to B- during the 1997 Asian currency crisis led to a rise in foreign currency loans’ cost, and this placed a heavy burden on the overall macroeconomy. When the credit rate is downgraded, the demand for that country’s bonds is generally decreased as the risk premium for them increases. This in turn causes costs for government debt to rise, thus presenting difficulties for the stable management of national finance.