WASHINGTON (Yonhap) -- An aid-for-nuclear-freeze deal between North Korea and the United States has a positive effect on South Korea's credit outlook as it eases tensions over the communist nation's atomic weapons program, Moody's Investors Service said Monday.
Last week, Pyongyang agreed to freeze its uranium-enrichment facilities at Yongbyon and put a moratorium on nuclear and missile tests in return for massive food aid from Washington. The two sides are moving to have further negotiations.
"The announcement is credit positive in that it eases geopolitical tensions over North Korea's nuclear weapons program," said Thomas Byrne, senior vice president at Moody's.
A noteworthy element of the deal is the North's intention to readmit International Atomic Energy Agency monitors to Yongbyon, its main nuclear complex north of the capital, he added.
Byrne, however, echoed a cautious view prevalent in both Seoul and Washington over the North's long-term strategy.
"There is little trust between Washington and Pyongyang," he said. "And it is too early to see the agreement as a harbinger of a fundamental shift in North Korean behavior."
The North has habitually reneged on negotiated agreements, he pointed out. (Yonhap)