Moody's ups South Korea outlook to positive

Moody's Investors Service said it raised South Korea's local-currency bank deposit ceiling to Aa1 from Aa3 and changed the outlook to positive from stable, citing the government's continued fiscal prudence, improved macroeconomic prospects and a containment of geopolitical uncertainties.

The A3 long-term foreign- and local-currency ratings, the A3 foreign-currency country ceilings for bonds, notes and bank deposits and the Aaa local-currency bank deposit ceiling were affirmed.

The agency said that underlying the positive outlook it a stronger commitment by the South Korean government to reinvigorate liberalization and deregulation, a strategy that helped the South Korean economy recover from the 1997 financial crisis. An added boost to the country's competitiveness and long-term growth potential will generate more resources for the government to meet growing domestic social welfare demands.

Moody's said ratings continues to incorporate geopolitical risks associated with North Korea, including the threat posed by the North's nuclear weapons program.

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