The possibility of South Korea defaulting on its credit loans has dipped to the lowest level in over 11 years, with its credit default risk shrinking to lower than those of other major economies such as China, Britain and France, the central bank said Saturday.
According to the Bank of Korea, the country's Credit Default Swap premium on foreign exchange stabilization bonds with a five-year maturity came to 32 basis points, or 0.32 percent, as of Friday, down 9 basis points from 41 bp on Jan. 3.
A CDS premium is additional interest paid on borrowing to offset a country's default risk.
The central bank said the latest reading marks the lowest since Nov. 2007. It is also lower than 36 bp for both Britain and France and 54 bp for China.