Najib: Risk of default minimal despite capital outflow

Najib: Risk of default minimal despite capital outflow
Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com
Thursday, 19 September 2013 17:57

KUALA LUMPUR (Sept 19): Prime Minister Datuk Seri Najib Abdul Razak said today the risk of default is low in Malaysia although the country is seeing capital outflow.

Although Fitch Ratings has downgraded the country’s sovereign credit outlook to negative, the prime minister said at the CNBC Summit Malaysia 2013 today: "We are on solid ground’.

“Most of our debts are domestic based and are of the longer term, so the chances of risks of default is minimal,” said Najib.

“In spite of the capital outflow, we currently have reserves amounting to US$130 billion, which is more than nine months of retained imports. So, our fundamentals are strong.”

The Malaysian premier recalled that the country possessed below US$30 billion of reserves during the Asian financial crisis in 1997.

Compared with 1997, the resilience of economy currently is much stronger, he opined.

“The difference between the Malaysian market and some other emerging markets is that we have huge savings in the form of EPF (Employees’ Provident Fund), Tabung Haji and others,” he said.

“Other countries do not have similar institutions. So, we have that buffer in our system.”

CNBC’s interview with the prime minister will be aired on CNBC channel, at 5pm tomorrow.