Bangkok--1 Aug--Standard & Poor's Standard & Poor's Ratings Services today affirmed its 'A-/A-2' foreign currency and 'A+/A-1' local currency ratings on Malaysia. At the same time, it revised the outlook on the foreign currency rating to positive from stable, while maintaining the existing stable outlook on the local currency rating. "The outlook revision on the foreign currency rating to positive reflects the continued improvement to Malaysia's already strong external liquidity position," said Standard & Poor's credit analyst Sani Hamid of the Sovereign Ratings group. "Further supporting the positive outlook is our expectation of continued reforms, including that of Malaysia's government-linked companies." Malaysia's external liquidity position remains a linchpin of its credit standing. It has registered current account surpluses since 1998, and these are expected to continue into the medium term, albeit at a decreasing pace. The ratings on Malaysia also reflect the country's falling public sector external debt, and its open, diversified, and competitive economy. The positive outlook on the foreign currency ratings reflects our expectation that Malaysia's current external liquidity position will continue to improve. It also incorporates our expectation that there will be continued efforts to improve the corporate environment, public sector, and Malaysia's growth prospects through better-targeted spending. "Malaysia's credit standing could improve if these efforts result in stronger growth, which in turn would allow fiscal consolidation with lower deficits, and a reduction of government debt and lower contingent liabilities," said Mr. Sani. "Conversely, the outlook could be revised to stable if the fiscal stance loosens further or if there is a reversal in the area of reforms." Complete ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select Ratings in the left navigation bar, then Credit Ratings Search. Media Contact: David Wargin, New York (212) 438-1579 [email protected] Analyst Contacts: Sani Hamid, Singapore (65) 6239-6346 Agost Benard, Singapore (65) 6239-6347