[ad_1]
KUALA LUMPUR: The Fitch Ratings downgrade of Malaysia’s credit rating from A- to BBB + will not stifle efforts towards economic recovery in 2021, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.
“Budget 2021 initiatives will continue the momentum of the recovery and are expected to contribute to the gross domestic product (GDP) growth target of between 6.5% and 7.5% next year.
“Many have often said that this projection is too optimistic. However, Fitch itself has projected that the local economy will grow 6.7 percent, in line with Malaysia’s projection.
“Other institutions such as the IMF (International Monetary Fund) have forecast growth of up to 7.8 percent, higher than the government’s projection.
“This generally shows confidence in the capabilities of the Malaysian economy to recover,” he said in response to a question from Lim Guan Eng (PH-Bagan) during the minister’s question time at Dewan Rakyat today.
Lim wanted to know what steps the government has taken to address the Fitch downgrade.
Tengku Zafrul said that since Fitch’s announcement, there has been no knee-jerk reaction from the market.
“In this sense, the FBM KLCI and the ringgit remained stable and we registered a high demand (Bid to Cover Ratio) that was 2.6 times greater than the value of the offer for MGII bonds (Malaysian Government Investment Issues ) to 10 years issued last week.
“And yesterday, I announced that eight venture capital fund managers from the United States, South Korea, China, Indonesia and Singapore have agreed to invest in Malaysian startups with an investment value of up to RM1.57 billion.
“In simple words, investor confidence in the country’s long-term capital market remains strong,” he said.
On good governance practices, Tengku Zafrul said that any appointment of board members, including politicians, is made on the basis of suitability in terms of qualifications, experience and knowledge.
It also takes into account the inclusion and diversity policy under the Malaysian Corporate Governance Code 2017, he added.
“In addition to that, depending on the status of the company, political appointments must go through various evaluations, such as those of Bursa Malaysia, the Securities Commission, Bank Negara Malaysia, the Malaysian Anti-Corruption Commission, the Royal Malaysian Police and others.
“I would like to emphasize that the government is committed to ensuring that best governance practices are upheld at all times,” said Tengku Zafrul.
He said that once the economy recovers, efforts will continue to strengthen the country’s economy.
“The government is committed to the implementation of sustainability and fiscal consolidation measures based on the Medium Term Fiscal Framework, as well as the enactment of a Fiscal Responsibility Law that aims to improve fiscal management and reporting, improving thus transparency and good governance.
“This includes lowering the level of national debt or the fiscal deficit assumed and inherited by the current government,” he said. – Called
[ad_2]
