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PETALING JAYA: Former Prime Minister Najib Razak said that Bank Negara Malaysia (BNM) can help the government and the Employee Provident Fund (EPF) deal with pressure on the domestic bond market should banks be allowed to people withdraw from your Account 1.
It said 4.57 million depositors had been approved to make monthly withdrawals from its EPF 2 Account under the i-Lestari scheme of the Prihatin economic stimulus package, announced by the government in March.
He said that from April to August 2020, EPF taxpayers withdrew a total of RM7.48 billion.
He said that based on this prior experience with the i-Lestari program, there may be up to RM 45.7 billion in one-time withdrawals from Account 1 if the scheme is implemented.
“If EPF or the government are concerned about pressure on the domestic bond market as a result of the liquidation of bonds of up to RM45.7 billion in a short period of time to fund the one-time payments of the scheme, BNM can help by it allows them to buy in the national bond market if necessary. “
Najib added that EPF had also announced that it made RM15.12 billion in profit for three months in the second quarter of the year.
“EPF also announced that the amount of assets in which it invested has a value of RM929,640 million as of June 30, where 49.2% of the investments are in the form of bonds.”
He said that having BNM buy the EPF bonds to finance the scheme was not risky, as Malaysia and the world were experiencing negative inflation due to economic headwinds.
“In fact, EPF can also choose to make these one-time payments on a monthly basis in three or six months.
“And when the money reaches the rakyats who need it and they spend the money, this will also boost the national economy.”
Previously, Najib had suggested that the government allow the public to withdraw from their first EPF account.
However, Prime Minister Muhyiddin Yassin said that this will be very risky.
Speaking at an event in his Pagoh, Johor constituency yesterday, Muhyiddin said EPF taxpayers will face “bigger problems” in the future if Putrajaya allows them to withdraw money from their EPF Account 1 now. Taxpayers to the EPF are supposed to use this money after retirement.
Muhyiddin said that requests had been made for taxpayers to be allowed to withdraw from Account 1 now due to the economic impact the Covid-19 pandemic had on people, and many were laid off.
Muhyiddin said he knew he couldn’t advise people to spend in moderation as he was concerned that such advice would not be well received.
EPF members generally use Account 2 to reduce their home loan repayment and save on their interest. Others also depend on him for their tertiary education and medical needs.
However, in March this year, the government announced that some 12 million Malaysians will be allowed to withdraw RM500 per month from their EPF Account 2 over the next year, as part of measures to help the public cope with the financial impact. Covid- 19 restrictions.
