Moody's says 1MDB does not pose systemic risk

Moody's says 1MDB does not pose systemic risk
PHOTO: Reuters

HONG KONG - Malaysia's economy, its banking system and government finances are not under systemic risk from developments at state fund 1Malaysia Development Bhd (1MDB), rating agency Moody's said on Monday.

Moody's said the rise in political friction has not affected the Government's stance on fiscal reforms.

Two of Malaysia's main opposition parties on Sunday demanded an emergency sitting of parliament to discuss the prime minister's future, and Malaysian stocks eased on Monday.

Moody's said in an emailed response to Reuters that developments related to 1MDB would affect the country's A3 rating only if they materially affected the trend of fiscal consolidation that supports its positive outlook.

The agency also added that last week's media reports were not specific with regards to their sources and "not much different from a lot of the developments related to 1MDB over the past year."

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