KUALA LUMPUR: Moody’s Investors Service has rated Malaysia’s A3 sovereign rating outlook as stable aided by its resilient growth, deep and liquid domestic capital markets that assure favourable financing conditions and a strong external position.
Moody’s credit analysis titled, “Malaysia”, said the country’s financial system and strong corporate sector contributed to the net international investment surplus.
“These advantages have ensured the ‘finance-ability’ and ‘affordability’ of Malaysia’s large fiscal deficits and higher government debt relative to its peers,” it said in a statement.
Moody’s explained that the stable outlook was supported by recent trends in economic performance, as well as, the initial gains from the government’s efforts at structural reform.
“Malaysia’s credit profile would be further enhanced by fiscal reforms that address weaknesses in both revenues and expenditures.
“The sound and liquid position of Malaysia’s banking system mutes the contagion risk from the financial channel should Euro zone banks deleverage.
“Capital market depth and the large buffer of foreign exchange reserves guard against a disruptive reversal of non-resident accumulation of Malaysian government debt,” Moody’s said.