Malaysia’s Long-Term Foreign Currency Issuer Default Rating Downgraded to BBB+ by Fitch; Outlook Stable

On the 4th of December 2020, Fitch Ratings (Fitch) downgraded to BBB+, Malaysia’s Long-Term Foreign Currency Issuer Default Rating (IDR) from A+, with the Outlook improving to Stable from Negative. Key factors leading to the downgrade include a weakening in the country’s credit metrics as Malaysia’s economy has been severely impacted by the COVID-19 crisis, despite relief measures swiftly being put in place by the authorities.

According to Fitch, Malaysia’s fiscal burden has increased as a result of these relief measures. In addition, political uncertainty due to the change in the Government of Malaysia in March 2020 has impacted the policy outlook as well as the possibility of further improvements to governance standards....