KL's policy inconsistent

KL's policy inconsistent

KUALA LUMPUR (Dow Jones): International ratings agency Fitch IBCA yesterday assigned a first-time long-term foreign currency rating of triple-B-minus to Malaysia, citing the country's relatively low external debt levels, but also highlighting an "inconsistent policy stance."

Fitch IBCA said its rating will apply to all senior, unsecured sovereign and sovereign-guaranteed foreign currency debt issues, and will set a ceiling for banks and corporates in Malaysia. A short-term currency rating of F3 was also introduced.

The agency said Malaysia's low external debt, coupled with strong foreign reserves, justify investment grade ratings. Fitch IBCA also highlighted strong foreign direct investment inflows and a well-developed domestic capital market which has limited excessive foreign borrowing.