S&P affirms Malaysia’s currency ratings, says outlook stable

SINGAPORE - Standard & Poor's has affirmed its 'A-' long-term and 'A-2' short-term foreign currency sovereign credit rating on Malaysia, saying it does not that believe corruption allegations involving 1Malaysia Development Bhd. (1MDB) will impede current policy flexibility and responsiveness.

S&P has also affirmed its 'A' long-term and 'A-1' short-term local currency sovereign credit rating on Malaysia, and says the outlook on the long-term rating remains stable. “We also affirm our 'axAAA/axA-1+' ASEAN regional scale rating on Malaysia,” S&P says.

“The ratings on Malaysia reflect the country's strong external position and considerable monetary flexibility. We weigh these strengths against Malaysia's moderate fiscal deficits and Government debt burden.

“Malaysia's strong external position, a result of years of current account surpluses, underpins the ratings. We believe this position can withstand a slowdown in the oil and gas sector over the next two years. Likewise, external indicators are likely to remain unchanged, given our assumption of continued healthy trade surpluses.

“For 2015, we expect a weaker ringgit to boost exports of manufactured goods, and to partly offset the impact of lower oil prices on Malaysia's energy exports.” www.standardandpoors.com (ATI).