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Fitch says may downgrade Malaysia rating in upcoming review

[KUALA LUMPUR] Credit ratings agency Fitch said on Tuesday that it would review Malaysia's rating in the first half of 2015 and that it may downgrade the sovereign.

"The Negative outlook indicates that Fitch is more likely than not to downgrade the rating of the sovereign," Sagarika Chandra, an associate director of S&P, said in a statement issued by the rating agency.

The agency viewed the government's revision of its fiscal deficit target to 3.2 per cent of the gross domestic product (GDP) as evidence that "dependence on commodities remains a key credit weakness for Malaysia".

In its note, Fitch said that Malaysia's "credit profile remains vulnerable to sharp movements in commodity prices" and that "further measures might be required" for the country to meet its target of a balanced budget by 2020. Prime Minister Najib Razak made a budget revision on Tuesday to reflect falling oil prices and a weakened ringgit.