Credit ratings agency Fitch said today 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 Fitch Ratings, said in a statement issued by the rating agency.

The agency viewed the government's revision of its fiscal deficit target to 3.2 percent 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 today made a budget revision to reflect falling oil prices and a weakened ringgit.

Meanwhile, credit rating agency Standard & Poor's said that a prolonged slump in oil prices could derail Malaysia's fiscal consolidation plan and put at risk the government's revised economic growth forecast of 4.5 to 5.5 percent.

"The risks are that the contracting oil and gas sector could affect activities in other sectors to bring down overall economic growth," YeeFarn Phua, associate director of Sovereign Ratings at S&P said about Malaysia's revised budget announcement.

The ringgit currency fell to a six-year low as the government today cut its economic growth forecast, reduced its budget and widened its fiscal deficit target for 2015.

- Reuters