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Moody's downgrades Malaysia
Copyright ) 1997 Nando.net
Copyright ) 1997 The Associated Press
KUALA LUMPUR, Malaysia (December 22, 1997 02:07 a.m. EST
http://www.nando.net) -- Moody's Investors Services downgraded Malaysian
bonds and bank deposits today, citing the country's increasing
vulnerability to financial instability in the region.
Moody's, an international rating agency, downgraded Malaysia's foreign
currency country ceiling for bonds from A2 to A1 and lowered the bank
deposit ceiling to Baa1 from A1.
Over the weekend, the International Monetary Fund forecast that Malaysia
would record a GDP growth rate of 2.5 percent during 1998, about half
the figure Malaysian authorities had projected.
Malaysia's currency and stock market have been among those hardest hit
by the region's economic turmoil. Since July, the Malaysian ringgit has
depreciated 34 percent.
To cool its over-heating economy, Malaysia has cut government spending
by 18 percent, trimmed Cabinet salaries and canceled expensive building
projects.
Thailand, Indonesia and South Korea have accepted IMF bailouts totaling
nearly $100 billion to save their economies this year but Malaysia has
maintained it will handle its financial problems without IMF assistance.
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