KUALA LUMPUR: The Malaysian corporate sector holds US$190 billion in foreign currency liquid assets located abroad, which is indicative of the country’s robust international investment position, said Bank Negara Malaysia (BNM) Deputy Governor Datuk Marzunisham Omar.
He said the corporate sector is compromised of financial institutions, government-linked investment companies and government-linked companies that have investments abroad and generate income from their foreign investments.
“We are not asking them to liquidate their assets, but BNM is encouraging them to bring back the realised profits and covert them into ringgit,” he said.
According to Marzunisham, Malaysia has maintained a current account surplus for the past five years, which includes the holding of foreign assets by corporate and financial institutions.
“They can use this (foreign holding) to meet their financial obligations and this will significantly reduce the need to come to the central bank for foreign currency,” he added.
The session was timely with Malaysia’s international reserves adequacy, which has gained increasing attention in the media and among analysts in recent periods, particularly against the backdrop of the strengthening US dollar.
Focusing on the international reserves of BNM, the deputy governor said that the country’s reserves remained resilient due to the level of external debt to the gross domestic product being manageable.
“One-third of the external debt is in the form of ringgit and we are not exposed to foreign currency fluctuation, with less than 3% of government debt in foreign currencies and almost 96% of government debt is in ringgit,” Marzunisham noted.
Meanwhile, ASEAN+3 Macroeconomic Research Office (AMRO) Group Head and Principal Economist Dr Ruchana Ponsaparn said ASEAN economies are well prepared financially, particularly in terms of international reserves.
“We have a low public debt and at the same time, our banking system has already built a significant buffer in terms of capital and liquidity,” she said.
— BERNAMA
