Govt to raise up to Rm35bil from local market

Malaysia not issuing any foreign currency bond

“The third quarter will see better growth. I am very optimistic.” Tengku Zafrul Abdul Aziz

KUALA LUMPUR: The government will borrow up to Rm35bil locally to finance its Rm295bil initiatives to spur the economy, namely for the Prihatin Rakyat Economic Stimulus Package (Prihatin) and the National Economic Recovery Plan (Penjana).

Finance Minister Tengku Zafrul Abdul Aziz said out of the total worth of initiatives, some Rm45bil would be directly injected by the government, of which Rm35bil would be raised from local borrowings.

He also said Malaysia would not issue any foreign currency bond to finance the fiscal injection given its strong liquidity position.

“Although we can, technically, as our limit is Rm35bil and our current exposure in terms of foreign borrowings is around Rm13bil.

“We (are) still left with 15% capacity to borrow.

“Given the liquidity to date, for ringgit especially, we see (there is) no reason why we should tap into the foreign bond currency,” he told a press conference after making a working visit to the Employees’ Provident Fund (EPF) headquarters here yesterday.

Also present were EPF chairman Ahmad Badri Mohd Zahir and chief executive officer Tunku Alizakri Raja Muhammad Alias.

Tengku Zafrul said the fiscal injection for Penjana alone totalled Rm10bil, which would be raised through Malaysian Government Securities (MGS) and Malaysian Government Investment Issue (MGII).

On another note, he said the government had so far no plans to seek a special dividend from the national oil company, Petroliam Nasional Bhd.

The finance minister was also optimistic that Malaysia’s gross domestic product would rebound in the third and fourth quarters of this year as economic activities locally and globally have resumed.

“Hopefully to see better numbers in June and the momentum will continue in July, August and September.

“So (the) third quarter will see better growth. I am very optimistic,” he said.

Tengku Zafrul expected the fiscal deficit would increase to between 5.8% and 6%t following the implementation of Prihatin and Penjana. — Bernama