PUTRAJAYA, May 25 — Finance Minister Lim Guan Eng is sanguine about the government’s ability to honour the debt obligations relating to 1Malaysia Development Bhd (1MDB), thus sending positive signals to the financial markets.
He said that the government still have funds to pay the debt obligations of the debt-laden state strategic investment fund and the present government was committed to resolve the issue.
“We will honour our international obligations and this will reassure the market that this government knows what it is doing and it (the government) is market friendly and follow international financial norms,” he told reporters when doorstepped after attending his first Ministry of Finance (MoF) monthly meeting here today.
He explained that Malaysia’s economic fundamentals were still intact, however, the new government would strive to make the country’s fiscal position more sustainable.
“In the finance sector, for example, it is still strong and banks are stable because of (having) high capitalisation and with low non-performing loans...and liquidity in the funds or capital market are high,” he said.
On the stock market’s shock reaction to the government’s transparency on the state’s financial position, Lim said the revelation might or might not be the cause of the losses on Bursa Malaysia.
“Whether this is the cause, it is up to market to determine, but it is not only in Malaysia that the stock market has fallen. You look at Thailand, United States and other countries, there are other stock markets that have fallen. There are other international factors.
“Let the stockbrokers or analysts see whether this is only in Malaysia or it is regionally or globally. But of course we will keep an open mind and take all views and accept this criticism,” he said.
Bursa Malaysia extended its losses yesterday, with analysts attributing this to the national debts and issues lingering on 1MDB as the causes of concerns among investors. — Bernama