Finance Minister Lim Guan Eng said good debt management would be maintained to ensure the fiscal position and macroeconomy remained strong for managing any crisis.
KUALA LUMPUR: The government is considering a combination of debt issuance and the monetisation of its assets in order to to meet its financing needs.
Finance Minister Lim Guan Eng the combination of strategies was to avoid over-reliance on any one specific strategy.
In a statement, he said in identifying the optimal mix of financing options, the government’s priority will be towards finding the lowest financing cost.
“Second, the timing and size of fund raising will be guided by the ability of the financial markets to absorb it in an orderly manner and avoid unintended consequences.
“Third, any form of strategy adopted will be focused on maintaining the overall confidence in fiscal sustainability and economic resiliency,” he said.
On the issuance of debt, Lim said there were plenty of benefits to the issuance of sovereign debt.
“This method is the simplest, most reliable, and easiest to manage due to the size of our institutional investors.
“Rest assured that the additional debt issuance will be gradual as well as transparent to the market via announcements through the auction calendar as per current practice,” he said.
This, he said, will ensure that investors would be able to absorb the additional issuances without major adjustments in yields that could increase the borrowing cost of the government.
On asset monetisation, Lim said the government will look to monetise some of its non-critical and non-strategic assets by engaging in the sale of shares, land, and leasing of idle government assets and buildings.
“We will ensure that this will be deployed in compliance with the highest standard of governance and transparency without disruption to the business community and the people,” he said.
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