Malaysia needs to cut budget deficit to earn credit upgrade |
Reuters, Kuala Lumpur
Malaysia must cut its budget deficit further and work harder to spur the private sector before it can earn another sovereign credit upgrade, credit rating agency Standard & Poor's said Friday.
"The pace seems to have slowed slightly in terms of reforms and that's why you see that the rating has been stable," Ping Chew, a director of sovereign ratings for S&P, told reporters at a briefing in Malaysia.
S&P rates Malaysia's long-term foreign currency sovereign credit at 'A-minus' and short-term foreign currency rating 'A-2'. Its long-and short-term local currency ratings are 'A-plus/A-1'.
Malaysia is considering issuing a global bond this year and a ratings upgrade would make the issue more marketable, allowing it to seek better terms.
All three of the big international rating agencies have raised Malaysia's credit standing in the past one-hand-a-half years -- S&P in October 2003, Fitch in November 2004 and Moody's last December.
Fitch and Moody's cited Malaysia's move to rein in its chronic budget deficit, its healthy current account surplus and growing foreign reserves among their reasons for upgrading.