You may not see this on Facebook. It’s okay. At least you read about it here. Standard & Poor’s Rating Services has maintained Malaysia’s positive sovereign rating outlook for Malaysia at A- long-term and ‘A-2’ for short-term foreign currency. It said the ratings reflect the strong external position and considerable monetary flexibility. In brief, rating shows Malaysia is doing fine currently even if everything being shared are only about one man and one issue; negative. The other two, Fitch Ratings and Moody’s have also earlier maintained Malaysia’s rating at the lowest investment grade. (YES, still investment grade, for now)
Strong external position is due to the position of foreign currency reserves. It is 1.1 times the external short-term debt. It’s continuing to decline and is currently at US$100.5 Billion. Monetary flexibility is because our interest rate is not at zero. Thus, Bank Negara still have flexibility to adjust it upwards or downwards depending on the growth. Yes, interest rate is a huge thing. This is one major reason why people are buying more US$ in anticipation of a rate increase by the Federal Reserve. It has been forecasted to happen in September. Until then, I think US$ will remain very strong if not stronger than today.
This does not affect the property market directly but should Malaysia’s rating drop, of course sentiment would be more negative than today. That’s when everything slows because everyone would be too worried to do anything at all. Hold undervalued properties. Sell fully valued ones and buy undervalued ones. In popular areas, majority of the properties are still at the highest point. In secondary areas, lots of bargains to be found still. Do take a look. As for these ratings, if it’s a negative one, you can read in Facebook. If it is still a positive one, you will read it here. Happy researching.
written on 4 July 2015
next suggested article: Fitch Ratings, Malaysia, 1st July 2015
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