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KUALA LUMPUR(Bernama) -- ARC Ratings SA (ARC), a global rating agency, has assigned a long-term foreign currency issuer rating of "A" to the Malaysian government.

The agency also assigned a long-term local currency issuer rating of 'A+' to Malaysia.

"Malaysia's ratings carry stable outlooks, and take into consideration our expectations that the external current account surplus will widen over the medium term and debt metrics will secularly improve.

"The stable outlook also reflects our expectation that the economy will reduce its reliance on oil exports and sustain competitiveness, while achieving steady per capita gross domestic product (GDP) growth," it said in a statement.

ARC said the key rating drivers supporting Malaysia's "A" foreign currency rating is based on Malaysia's strong external position with a history of current account surpluses and low foreign currency indebtedness.

"Malaysia has an increasingly diverse economic base that has unleashed meaningful growth and has allowed the country to steadily climb to high middle-income status.

"Strengthening competitiveness will help Malaysia return to more robust export-led growth despite of rising domestic costs," it said.

Plans to reduce fiscal deficits and debt are constructive to the ratings, according to ARC's statement.

ARC's sovereign ratings of Malaysia also reflects the expectation that the government's resolve towards fiscal consolidation will not be substantially diluted, despite the current cyclical macro challenges being faced by the economy.

-- BERNAMA