Bank of Korea sees no big impact from US rating cut

A senior Bank of Korea official said on Saturday that he saw no major short term impact from a cut in the US credit rating by Standard and Poor's to AA-plus. "Markets have already had a few scenarios on the US ratings and this was one of them, I think," head of the South Korean central bank's foreign exchange reserve management group, Hong Taeg-ki, told Reuters.
"An AA rating has no difference from AAA when it comes to the risk weighting of assets held by investors according to the Basel III guidelines and therefore there will be no big direct impact in the short run. And there is no alternative (to shift to)." South Korea has the world's seventh largest foreign reserves and is a major investor in US Treasuries. A South Korean finance ministry official in charge of foreign exchange markets declined to comment on the rating change.