South Korea’s credit default risks remained flat amid the economic downturn in emerging markets in Asia, data showed Thursday, apparently due to improved economic indicators for the country.

According to SuperDerivatives, a provider of real-time market data and analytics, the credit default swap premium for South Korean state bonds reached 85.96 basis points Tuesday, compared to 121.16 basis points tallied in June.

The spread on CDS reflects the cost of hedging credit risks on corporate or sovereign debt. A rise implies deterioration in the credit of government bonds and higher costs for issuance. A basis point is 0.01 percentage point.

The country’s CDS soared in June as the United States Federal Reserve implied that it is likely to start slowing the pace of its bond purchase program this year.

South Korea’s risk premium, however, returned to below 90 basis points due to its improved economic indicators in spite of rising risks in the emerging markets of Asia including Indonesia, Malaysia and Vietnam. Such countries are widely seen as crisis-prone markets as they have been suffering from market turmoil as speculation over the Fed’s stimulus tapering accelerated foreign capital flight.

South Korea, meanwhile, posted a current account surplus for the 18th straight month in July, and its gross domestic product grew 2.3 percent in the second quarter, making the market relatively immune to such risks.

Following an improvement in the CDS for Asia‘ fourth-largest economy, foreigners bought a net 1 trillion won ($898.8 million) on the main bourse in August, after offloading a net 9.2 trillion won through July this year. (Yonhap News)