Year-to-date, the ringgit is the worst performing currency in Asia. Last year, it was the second worst performing currency in the region after the Japanese yen.
THAT the ringgit has continued to slide over the week says it all: the revised Budget 2015 has not been very successful at restoring flagging foreign investor appetite for Malaysian assets.
Fresh concerns have been raised over the risk of the country’s sovereign debt rating being downgraded following the upward revision in the Government’s fiscal deficit target for 2015.
Despite the slew of measures announced for the revised Budget 2015 to cushion Malaysia’s economy from the blow of falling crude oil prices and slowing global growth, some foreign analysts now see Malaysia like one of those traditionally riskier regional economies such as Indonesia and India. They can’t seem to shake off the thought of how vulnerable the country is to low crude oil prices.
Fitch Ratings, which has put Malaysia on a negative rating watch since July 2013, for one, has said recently that it is “more likely than not” to cut the country’s debt rating.
The international rating agency, which is due to review Malaysia’s rating within the next six months, has cited the country’s dependence on commodities as a key credit weakness.
Two other international rating agencies – Standard & Poor’s (S&P) and Moody’s – have thus far ascribed a “stable” outlook on Malaysia’s sovereign rating. Via thestar.com.my