Abdul Rahim: We won’t dip into RM436.5bil global reserves

THE government will not dip into the nation’s RM436.5bil international reserves for Budget 2021 or Covid-19 economic stimulus packages, says 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.

“The financial allocation for the Budget and economic stimulus packages are sourced through domestic borrowings from the local market, ” he told Pang Hok Liong (PH-Labis).

Abdul Rahim said as of Sept 31 this year, Malaysia’s international reserves stood at US$105bil (RM436.5bil), which is an increase of US$1.4bil (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 also said Bank Negara is using international standards to gauge the nation’s international reserves. These include the amount of foreign currencies, gold and other available assets. Malaysia’s financial standing by the International Monetary Fund is also looked into.

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

Among the foreign currencies held as reserves include those of the US, UK, Japan and EU, Abdul Rahim said.