Malaysis's credit profile is relatively resilient despite external vulnerabilities, says credit rating agency Moody's. 

"Our view on (Malaysia's) credit profile does not change during periods of heightened external volatility. 

"It would take a significant deterioration of external metrics from current levels for Malaysia's credit profile to weaken," Moody's said in a report on the Malaysian government. 

However, Moody's did point out the risks Malaysia faces from high levels of foreign investment in Malaysia, among others. 

 

 

 

 

 

 

"Foreign holdings of outstanding Malaysian government debt stands at about 24 percent, and non-residents account for close to 27 percent of total stock market capitalisation.

"This exposes the country to sudden movements in portfolio investment flows," Moody's reported. 

The agency added that Malaysia also faced rollover risks due to its rising short-term external debt, which is at 49.1 percent of the gross domestic product (GDP). 

It said there were also currency risks as 60 percent of the country's external debts are in foreign denominations. 

These risk factors, Moody's said, are tempered by "prudent monetary policy" as well as a large domestic institutional investor base. 

It also cautioned that the country's current account surplus was steadily shrinking and was providing "less of a cushion than in the past".