Bank Negara's international reserves still sufficient to sustain economy, Dewan Rakyat told


KUALA LUMPUR: Malaysia's central bank's international reserves are still sufficient to sustain the economy, the Dewan Rakyat was told.

Deputy Finance Minister II Yamani Hafez Musa said that Bank Negara Malaysia's (BNM) international reserves stood at US$109bil (RM480.1bil) as of June 30, compared to US$112.8bil (RM474.2bil) the previous month.

He explained that the current figure is enough to accommodate imports of goods and services for 5.8 months, and is 1.1 times the country’s short term external debt.

“This is based on assessing the reserve adequacy metric by the International Monetary Fund (IMF).

“At the moment, our current reserves are considered sufficient, although we will continue to monitor (the situation) to stabilise our ringgit," he said in reply to a question from Datuk Che Abdullah Mat Nawi (PAS-Tumpat) during Question Time.

Che Abdullah had asked the Finance Ministry if there will be an increase of the country's short term external debt and actions taken to address the issue.

Yamani also admitted the importance of the international reserves’ support, adding that without it, there will be uncertain ringgit fluctuations due to the increased volatility in the market.

The deputy minister also pointed out that financial market stability was also important to boost foreign investors’ confidence in the local market, which will have a positive impact on the country’s international reserves.

To a separate question from Datuk Seri Ahmad Maslan (BN-Pontian) on the weakening ringgit compared to the US dollar, Yamani dismissed the suggestion that the ringgit is doing badly.

He explained that the US dollar was strengthening compared to the majority of global currencies, due to aggressive interest rate increases in the US as well as other external factors like the slow economic growth in China and the conflict in Ukraine.

“Since the start of 2022, the ringgit value fell -6.2% compared to the US dollar, which is in line with the movement of regional currencies and other developed nations, which saw a similar decrease of between -2.8% and -16.4%," said Yamani.

Yamani said the government will continue to manage the risks posed by domestic and external developments, adding that BNM will also continue to strive to ensure a stable foreign exchange rate.

On the impact of the overnight policy rate (OPR) which had increased by 50 basis points this year, Yamani said the gradual hike is not expected to gravely affect Malaysians.

Citing an example, he said that one-third of borrowers from low-income households took fixed rate car and personal loans as opposed to the floating rate, which will be affected by the OPR hike.

“For floating rate borrowers, the increase in monthly payment will also not increase significantly.

“At the same time, depositors will also benefit from higher interest returns,” he said.

Article type: free
User access status:
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!
   

Next In Nation

Sangkar’s appointment unlikely to change Pakatan’s influence in Sabah, says analyst
Jamal Yunos acquitted of uploading offensive content on FB
Nanogenarian dies, wife suffers injuries in Tangkak house fire
Nur Jazlan: Umno needs to win over young voters
MMEA searching for missing fishermen after boat capsizes near Pulau Redang
Selangor Sultan wants state govt to prepare comprehensive agricultural production plan
Seven Malaysian firms on Forbes Asia's Best Under A Billion list
Sabah Bersatu won't back down on parliamentary seats, says Srikandi chief
Report those who offer illegal dental training, says Health DG
LCS construction ongoing in Lumut, says LTAT boss

Others Also Read