Fitch cuts Korea, Malaysia outlooks

Fitch Ratings said it revised Korea's outlook to negative from stable and the outlook on Malaysia's long-term foreign-currency issuer default rating to stable from positive.

Fitch also said it affirmed the sovereign ratings with stable outlooks for China, Taiwan and Thailand. India's long-term foreign-currency issuer default rating is affirmed at BBB- with a stable outlook, along with its local-currency issuer default rating at BBB- with a negative outlook.

These actions follow the conclusion of a global review of the sovereign ratings of 17 major investment-grade emerging market economies conducted in response to the profound deterioration in the global economic and financial outlook, Fitch said.

The revision to Korea's outlook reflects concerns that the de-leveraging of the banking system may contribute to an erosion of the sovereign's external credit strengths, especially if it were accompanied by central bank interventions in the currency market to support the exchange rate, the agency said.

The revision of Malaysia's view took into account the likely impact on the balance of payments of lower oil and other commodity prices, Fitch said, as well as the deterioration in external demand conditions for electronics exports.

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