Sagarika Chandra (center), Fitch Ratings' Asia-Pacific sovereign ratings director, attends a media briefing in Seoul on Friday. (Choi Ji-won/ The Korea Herald) Global credit ratings agency Fitch Ratings on Friday affirmed South Korea's AA- sovereign rating with a stable outlook, citing the country's strong external finances, resilient exports and stable macroeconomic performance despite geopolitical risks and structural challenges."We think Korea has sufficient external and fiscal buffers to manage global challenges in the near-term," Sagarika Chandra, Fitch Ratings' Asia-Pacific sovereign ratings director, said at a press conference in Seoul.Chandra said net exports were likely to remain a key growth driver, with stronger semiconductor shipments pointing to upside risks for the rest of the year. The US and China remain Korea's main export destinations, she added."Growth in the first quarter rose by 3.6 percent on-year, better than expected, mainly driven by strong semiconductor (performance)," Chandra said, adding that the US and China remain key export destinations.For its 2026 growth forecast, Fitch kept its projection for Korea unchanged at 2.1 percent. Chandra pointed to stronger-than-expected first-quarter data points as potential for an upward revision, saying, "There could be some upside to the number for the year."Still, the conflict in the Middle East remains a risk for Korea, given its heavy reliance on crude oil imports from the region."The impact on the economy could be felt through higher imports, higher inflation and some negative impact on growth," she said, adding that government mitigation measures could limit the broader fallout.Korea's persistent current account surpluses also support its credit profile, reflecting a positive savings-investment balance and robust external finances, Chandra said. The country's net external creditor position stands at about 20 percent of GDP, slightly above the AA median of 17.8 percent, while Fitch expects Korea to keep running current account surpluses in 2026 and 2027.Fitch also expects the won to appreciate against the US dollar by end-2026 and end-2027. The won was trading at 1,509.6 per dollar as of close Friday, on the weaker end of its recent range after sliding from the mid-1,450s earlier this month, as the dollar strengthened and higher oil prices weighed on Asian currencies.Chandra cautioned against reading the won's recent weakness as a lasting trend, saying currency moves remain volatile and are also shaped by the dollar’s direction."To draw the conclusion that the exchange rate is going to remain weak is probably not accurate in the current environment," she said. "Sometimes it is simply the stronger dollar that makes the won weaker relative to it."On monetary policy, the agency expects the Bank of Korea to keep its policy rate unchanged at 2.5 percent through this year and next, assuming stable oil prices."If energy price shock translates into higher inflationary pressures in 2026, while the growth outlook remains robust, this could translate into policy hike later in this year," Chandra said.Fitch said Korea's debt-to-GDP ratio was not yet a concern, as it remains below the AA median despite its steady rise. But a continued increase in government debt, without an offsetting boost to potential growth from fiscal investment, could add pressure to the rating.The agency also cited the current administration's political backing as a source of policy strength."The current government has a majority in parliament, allowing it to pursue policy goals, with legislative elections due by 2028," Chandra said.