South Korea’s credit default risk fell below its 10-year low, following trade talk progress between the US and China and the latest result of the British election, the Ministry of Economy and Finance said Wednesday.

The country’s credit default swap premium for foreign exchange stabilization bonds with a five-year maturity stood at 22.2 basis points as of Tuesday, marking the lowest since the 22.1 basis points observed on Oct. 15, 2007.

While the United States and Japan respectively saw 15 basis points and 20 basis points in corresponding figure, China logged 33 basis points, reflecting a relatively high level of credit default risk.



“The stabilization of the domestic financial market and the decrease in CDS premium reflect the improved investor sentiment amid US-China trade talks,” the ministry said in a release.

Leading the change was the phase one trade deal which US President Donald Trump signed with China last week, which halted the tariffs against Chinese goods.

Also, British Prime Minister Boris Johnson’s party achieve a landslide victory last week, adding momentum to Britain’s exit from the European Union by Jan. 31 next year. The result was seen as alleviating the persisting uncertainties in the Brexit agenda.

By Bae Hyun-jung (tellme@heraldcorp.com)