Standard and Poor's said today it had raised Malaysia's sovereign credit ratings to reflect its progress in reducing its financial support for well-connected entrepreneurs.

The long-term foreign currency sovereign rating was raised one notch to BBB-plus from BBB and the outlook is stable, S and P said.

"The upgrade is to reflect the lower risk to the public purse from government support for ailing private-sector companies; a tendency that has eroded the government's financial position and created moral hazard for private business," S and P said in a statement.