The Moody's Investors Service on Wednesday raised South Korea's sovereign credit rating by one notch to "A2", South Korea's Yonhap News Agency reported.
"Korea's favorable macroeconomic performance will likely continue over the near term," Moody's Vice President Thomas Byrne said in a statement.
"Over the longer term, Korea's credit fundamentals should be strengthened by a renewed commitment to trade and financial sector and capital market liberalization," he said.
The agency said it raised South Korea's long-term foreign currency and local currency ratings from "A3" to "A2," the six- highest investment grade. It was the first increase by Moody's since March 2002.
The credit appraiser attributed the upgrade to South Korea's fiscal prudence, improving macroeconomic performance and eased geopolitical risks.
The raise comes about three weeks after Moody put South Korea's sovereign rating on a review for an upgrade.