KUALA LUMPUR – The Finance Ministry has refuted suggestions that the country’s financial status is in a grim state, describing the allegations made on social media as nothing more than malicious attempts to confuse the public.
In a statement today, its minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz maintained that the country’s fiscal position remains strong, while the national debt level is under control.
He cited several factors highlighting the government’s debt affordability and sustainability.
Among others, Tengku Zafrul noted how the government has remained disciplined in repaying its interests and debts that have matured, despite going through a series of economic and financial crises.
This, he said, proves Malaysia’s reputation and ability as a debtor with a good repayment record.
Tengku Zafrul also pointed out that 97% of the country’s existing debts are in the ringgit denomination, signalling a frugal debt management as there is minimal foreign exchange risk.
Separately, the minister stressed that a high debt level does not necessarily put the country at a higher risk of bankruptcy.
“Various international ratings agencies like S&P Global, Fitch and Moody’s evaluate the debt level of a country together with other factors like prudent fiscal framework, sound governance, strong external position, and economic resilience.”
Tengku Zafrul noted how the International Monetary Fund had previously acknowledged that Malaysia’s debt level is still manageable, while S&P predicted that the government’s policy planning will aid the strengthening of the country's fiscal position.
On top of this, he said existing laws also focus on prudent debt management, such as Article 98(1)(b) of the constitution, which stipulates that the government must always prioritise debt charges over other operational expenditures.
A separate provision, the External Loans Act 1963, provides that offshore borrowings must not exceed RM35 billion, with the current figure standing at RM29.4 billion, the minister said.
“Based on these factors, the ministry would like to dispel allegations by certain irresponsible and malicious quarters claiming Malaysia is headed for bankruptcy, similar to a South Asian country recently.”
While Tengku Zafrul did not mention any names, he is ostensibly referring to Sri Lanka, which is currently facing its worst financial crisis since independence.
He added that his ministry has also made an official complaint to the Malaysian Communications and Multimedia Commission on a number of false reports on social media about the country's debt position that risk affecting investors’ confidence. – The Vibes, July 14, 2022
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