“The small amount of external debt is in line with the government’s current policy which prioritises domestic borrowings to finance the country’s development projects as the cost is cheaper and there is less exposure to foreign exchange risk,” he said.
Najib said these debt instruments were subscribed by financial institutions, insurance companies and social security institutions.
On the borrowings for projects, he said the financiers were multilateral institutions such as the World Bank, Asian Development Bank and Islamic Development Bank while the bilateral institutions included Japan For International Cooperation (JBIC).
He said the interest rates varied and depended on the tenure of the loan and the prevailing market conditions when the bonds were issued.
Najib said the government’s contingent liabilities meanwhile were in the form of guarantees for the borrowings of statutory bodies and government companies.
As of Dec 31, 2008, the contingent liabilities of the government stood at RM69.2 billion comprising domestic borrowings of RM59.3 billion (86 per cent) and external borrowings of RM9.9 billion (14 per cent),” he said.
He said the guarantees involved two statutory bodies and 16 government-linked companies.
Meanwhile Bank Negara disclosed Malaysia's international reserves was US$95.7 billion (RM313 billion) on April 15 compared to US$95.3 billion on March 31.
The reserves were enough to finance 8.8 months of retained imports and were four times the short-term external debt.
So, do you get a picture of our reserves and indebtedness now?
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