Due to tensions spurred by North Korea's provocations, South Korea's credit default risk has hit an 18-month high.
 
The credit default swap(CDS) premium for South Korean foreign exchange stabilization bonds with a five-year maturity reached 70 basis points as of Monday.
 
This is the highest level since 71 basis points was recorded in February last year, according to data by the Korea Center for International Finance. The latest CDS premium is even higher than that of China's.
 
The spread 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. 
 
Finance Minister Kim Dong-yeon and Bank of Korea Governor Lee Ju-yeol discussed ways to cope with the situation on Wednesday.