Exchange rate fixed for ECRL loans, says Rahman

PETALING JAYA: There will be no foreign exchange risks from the Chinese renminbi-ringgit soft loan for the East Coast Rail Link (ECRL) as it will use a fixed exchange rate, Barisan Nasional strategic communications director Datuk Abdul Rahman Dahlan said.

“There will be no exchange rate exposure for us, as at the point of the first draw-down, the renminbiringgit exchange rate for loan repayment purposes will be fixed for the remainder of its duration.

“This fixed rate will also apply for future draw-downs and repayments of the renminbi-denominated portion of the loan,” he said in a statement yesterday.

Abdul Rahman said the effect of denominating all loan repayments in ringgit terms at a fixed exchange rate would eliminate the risk of exchange rate fluctuation.

“There will not be any foreign exchange risks for this loan as alleged by Tun Mahathir,” he said.

Abdul Rahman was responding to Dr Mahathir’s blog post titled “Najib’s China Trip” that made several allegations over the Prime Minister’s visit to China.

Dr Mahathir’s criticism centred on the soft loan that Malaysia will take to build the ECRL project.

Dr Mahathir in his post claimed that Malaysia’s debt would be “much more” than RM200bil due to the depreciation of the ringgit.