Malaysian Market News Update

The international reserves of Bank Negara Malaysia amounted to RM322.5 billion as at 29 May 2009, up RM2.1 billion or 0.66% from RM320.4 billion as at 30 April 2009. In US dollar terms, the international reserves of the central bank amounted to USD88.3 billion end May, an increase of USD0.5 billion or 0.57% from USD87.8 billion a month earlier. According to Bank Negara Malaysia, the reserves position as at end May is sufficient to finance 8.3 months of retained imports and is 3.8 times the short-term external debt.

Malaysia's long-term currency rating has been downgraded from "A+" to "A" by International ratings agency, Fitch. Fitch cited the country's growing budget deficit as the main concern. In a statement Tuesday, Fitch mentioned that they are expecting the budget deficit to rise 7.7% of the country’s gross domestic product this year. The budget deficit peaked last year when the government announced a RM67 billion economic stimulus package to deal with the global economic slowdown. They also added that Malaysia’s primary deficit of 6.4% of GDP would be among the worst, after only Latvia, Bahrain, Ireland and Vietnam.

Despite bearish news, the Kuala Lumpur Composite index climbed 3.97 points higher at 1075.76 points.

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