Malaysia's strong current account position and large foreign exchange reserves have helped the economy withstand the global recession and credit turmoil without creating concerns among investors about any external vulnerability. Exports have taken a severe hit due to the downturn in global electronics and commodity demand causing the trade balance to narrow. But sharp contraction in imports and surplus on service account have cushioned the current account. Global turmoil has led to portfolio outflows while export contraction and global credit crunch have hit foreign direct investment (FDI) inflows, leading to a negative financial account. The current account surplus has sustained the balance of payments (BoP) and foreign exchange reserves amid the negative financial account. However, low recovery in exports and FDI will continue to weigh on the BoP.