________________________________________________________________________ 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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