Country's international reserves cannot simply be used, says deputy finance minister

KUALA LUMPUR: The government will not dip into the nation's RM436.5bil international reserves for Budget 2021 or Covid-19 economic stimulus packages, said Deputy Finance Minister Datuk Abdul Rahim Bakri.

"The international reserves are for specific uses and not for the budget or Covid-19 economic stimulus packages following the pandemic.

"The finances for the budget and economic stimulus packages are sourced through domestic borrowings from the local market," he said when answering a question raised by Pang Hok Liong (PH-Labis) in Dewan Rakyat on Tuesday. (Dec 1)

As of Sept 31 this year, Abdul Rahim said the nation's international reserves stood at USD105bil (RM436.5bil) which is an increase of USD1.4 bil (RM5.7bil) compared to last year.

He said the reserves are sufficient to bear the cost of imports for 8.4 months or equivalent to 1.1 of the nation's short term debts.

Abdul Rahim informed lawmakers that Bank Negara was using the international standard to gauge the nation's international reserves.

He said this includes the amount of foreign currency available, IMF financial standing, gold and other assets.

He added the nation's central bank uses currency reserves as liability guarantee for the local currency and as reserve deposits with foreign banks.

He said that among the foreign currencies held as reserves include US, UK, Japan and EU currencies.

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