European Stocks Rally on Chinese Growth and Mining Merger Speculation 
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
Global Markets React to Strong U.S. Jobs Data and Rising Yields 
Stock Futures Dip as Investors Await Key Payrolls Data 
US Futures Rise as Investors Eye Earnings, Inflation Data, and Wildfire Impacts 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
Fed May Resume Rate Hikes: BofA Analysts Outline Key Scenarios 
Wall Street Analysts Weigh in on Latest NFP Data 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
US Gas Market Poised for Supercycle: Bernstein Analysts 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
Geopolitical Shocks That Could Reshape Financial Markets in 2025 
Moody's Investors Service says that it would take a significant deterioration of Malaysia's (A3 stable) external metrics from current levels for the country's credit profile to weaken.
Moody's conclusion is contained in its just-released report titled "Government of Malaysia: Credit profile relatively resilient despite external vulnerabilities".
The report explains that Malaysia's foreign currency reserves have climbed out of a recent trough, but remain lower than aggregate cross-border debt due over the next year. An active nonresident investor presence in Malaysia's financial markets also leaves the country vulnerable to sudden swings in capital flows.
Since mid-2016, short-term external debt by original maturity has risen to nearly half of external debt, presenting rollover risks. In addition, almost 60% of total external debt is denominated in foreign currency, which gives rise to some currency risk.
While foreign reserves are still larger than short-term debt by original maturity, once currently maturing medium- and long-term debt is added, the ratio of annual external liabilities due over the next year to reserves (the external vulnerability indicator, or EVI) has been significantly above the 100% threshold for years. Moody's forecasts Malaysia's EVI at 143% for 2018.
However, currency flexibility, prudent monetary policy and a large domestic institutional investor base buffer the impact of capital flow volatility, with large export proceeds and external assets acting as a further cushion.
Moody's points out that since its assessment of Malaysia's overall sovereign credit profile incorporates its vulnerability to capital volatility, trends in the EVI and the basic balance, its credit profile is relatively resilient to periods when such external volatility heightens. Other sources of credit risk would be a sharp growth slowdown or meaningful weakening in public finances; neither factors of which Moody's deems likely at this time.
