Malaysian govt bond redemption by foreign investors not a concern, says Zeti

by **Cals** Wed 30 Sep 2015, 22:09

Malaysian govt bond redemption by foreign investors not a concern, says Zeti
By Esther Lee / theedgemarkets.com | September 30, 2015 : 12:27 PM MYT

KUALA LUMPUR (Sept 30): Bank Negara Malaysia (BNM) Governor Tan Sri Dr Zeti Akhtar Aziz said the redemption of matured Malaysian government bonds by foreign investors, if any, is not a concern.
"No. It won't because those are ringgit denominated instruments," replied Zeti when asked if the redemption of government bonds by foreign investors would further impact the country's foreign reserves.
The BNM governor was speaking to reporters after her opening remarks at the Malaysia-OECD High-Level Global Symposium on financial well-being today.
The governor also said that the country has domestic institutional investors who will step in and lend support to the bond market in the event foreign investors decide to cash out and not re-invest in the local market.
"We have our own domestic institution investors, like Employees Provident Fund, Permodalan Nasional Bhd and the insurance industry [who is] a major player in the bond market.
"So our own institutional investors will step in to purchase those [bonds]. So we don't expect any collapse of our bond market," she explained.
Zeti also reiterated that there is no intention to impose capital controls or a currency peg.
Earlier, Reuters reported that there are RM11 billion government bonds that will mature today.
Foreign investors who dominate about 45% of the outstanding bonds are seen to likely pull out their cash from the market rather than re-invest it in the country due to political uncertainties and currency risk, added the report.