PETALING JAYA: There will be no foreign exchange risk for the East Coast Rail Line (ECRL) loan, as alleged by former premier Tun Dr Mahathir Mohamad.
In a statement Thursday, Barisan Nasional strategic communications director Datuk Abdul Rahman Dahlan (pix) said the soft loan facility for the ECRL is in a mix of Chinese yuan and ringgit, not just ringgit alone.
"There will be no exchange rate exposure risk for us as at the point of the first draw-down of the loan, the yuan-ringgit exchange rate for loan repayment purposes will be fixed for the remainder duration of the loan," said Abdul Rahman, who is also Minister in the Prime Minister's Department.
"This fixed rate shall also apply for future draw-downs and repayments of the Renminbi (RMB) denominated portion of the loan," the Kota Belud MP said.
Abdul Rahman said that the effect of denominating all loan repayments in ringgit terms at a fixed RMB-RM exchange rate eliminates the risk of exchange rate fluctuation.
"Therefore, there will still not be any foreign exchange risk for this loan as alleged by Tun Mahathir," he said.
Abdul Rahman was responding to Dr Mahathir’s blog post titled "Najib's China Trip" that made several allegations over Prime Minister Datuk Seri Najib Tun Razak's visit to China.
The crux of Dr Mahathir's criticism centred on the soft loan that Malaysia will take to build the ECRL project.
Dr Mahathir in his post claimed that Malaysia's debt will be "much more" than RM200bil due to the depreciation of the ringgit.