Moody's upgrades Malaysia's foreign currency country ratings

Asian Economic News, Oct 23, 2000

HONG KONG, Oct. 17 Kyodo

Moody's Investors Service upgraded Malaysia's foreign currency country ratings, with a stable outlook Tuesday.

The Malaysian long-term ceiling for foreign currency bonds and notes was upgraded to Baa2 from Baa3, while that for bank deposits to Baa3 from Ba1, the U.S.-based rating agency said in a statement.

The short-term ceilings were increased to Prime-3 from Not Prime.

The Malaysian government's A3 domestic currency rating was not under review.

Moody's said the upgrades were supported by the continued strengthening of Malaysia's external financial position as shown in its lower level of short-term external debt, relatively high level of international reserves and large current-account surpluses.

The agency said it expects the current account to remain in surplus through 2001, although the surplus is likely to be smaller than during the 1998-2000 period.

Yet, the ability of the Malaysian government to deal with future shocks may now be somewhat less than that before the Asian financial crisis, Moody's said.

''This factor, plus a less-than-complete recovery in foreign direct investment and some increase to political uncertainty, means that Malaysia's rating are likely to remain depressed relative to their pre-crisis level,'' the agency said.