Finance minister: Malaysia has enough cash within country, no need to borrow externally to fund Prihatin, Penjana packages

Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz (centre) during a visit to the Employees Provident Fund’s headquarters in Kuala Lumpur June 12, 2020. — Picture by Miera Zulyana
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz (centre) during a visit to the Employees Provident Fund’s headquarters in Kuala Lumpur June 12, 2020. — Picture by Miera Zulyana

KUALA LUMPUR, June 12 — Malaysia has sufficient liquidity to fund its Prihatin Rakyat Economic Stimulus Package (Prihatin) and National Economic Recovery Plan (Penjana) without resorting to external loans or issuing bonds in foreign currency, Tengku Datuk Seri Zafrul Abdul Aziz said today.

The finance minister explained that the ringgit is reasonably liquid.

“Given the liquidity today, we see no reason why we should tap into foreign borrowing, so instead we borrowed from the local currency,” Zafrul said during a press conference following a visit to the Employees Provident Fund headquarters along Jalan Raja Laut.

He added that the government is still able to borrow up to 15 per cent of its capacity from external sources, but decided not to do so.

“We estimate that we need to borrow approximately RM45 billion for the packages, RM35 billion for Prihatin and RM10 billion for Penjana respectively.

“Since we have enough to borrow in the market, we are able to tap into it as borrowing is now cheaper,” Zafrul said.

When asked, the minister also said there are no plans to ask special dividends from national oil company Petronas.

First announced by Prime Minister Tan Sri Muhyiddin Yassin on March 27, Prihatin’s measures include various initiatives to support small and medium enterprises in the country, and aid the public to ease their cash flow problems, among others.

Penjana was announced last week, and is aimed providing relief to target groups. It takes over several of Prihatin’s initiatives such as the Employment Retention Programme and Wage Subsidy Programme.

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