KUALA LUMPUR: Moody’s Investors Service (Moody’s) said Sarawak’s A3 rating reflected its long-term track record of generating strong operating surpluses, coupled with conservative budgetary practices.

This allowed the state to build up substantial cash reserves during periods of strong commodity prices, it said in a statement today.

The rating agency said such reserves are a key source of financial flexibility, particularly because they exceeded the state’s sizeable debt burden.

“Additionally, the institutional framework for Sarawak provides more sources of revenue than most other states in Malaysia (A3, stable), and Sarawak has demonstrated its ability to expand its revenue base.

“Sarawak’s rating also took into account the moderate likelihood of support from the Federal government in the event that the state faces acute liquidity crisis,” it added. – Bernama