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Najib: Malaysia's languishing reserves means we cant pay back short-term loans

The Star Online logo The Star Online 7/11/2018 ALLISON LAI
Najib Razak wearing a suit and tie © Provided by Star Media Group Berhad

PETALING JAYA: Former prime minister Datuk Seri Najib Tun Razak is concerned over the country's international reserves, saying there are insufficient funds to service short-term foreign loans.

He said Malaysia's current international reserves, which Bank Negara announced at US$101.7bil (RM424.6bil) on Wednesday (Nov 7), was not enough to finance 7.5 months of delayed imports and 0.9 times the short-term foreign debts.

"My concern is on the 0.9 times the short-term foreign debts.

"Being below 1.0 times, it means our reserves are insufficient to pay all short-term foreign debts when they are called up.

"For example, we owe a foreigner $100 but only have foreign currency of $90 to pay it back. This is a new risk for the country.

"(Finance Minister) Guan Eng needs to take note," he wrote on his Facebook page Wednesday.

Najib: I wouldn't steal borrowed funds (Dailymotion)

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Najib said he had never seen the reserves figure fall below 1.0 before the 14th General Election.

"It is usually 1.1 times and above," he said.

Najib noted that the figure dropped to US$101.7bil (RM423bil) after GE14 and experienced a downward trend due to the continuous outflow of foreign funds from the country.

He also added that Malaysia's international reserves had fallen to US$8.3bil (RM34.6bil) since mid-April.

Short-term debts refer to debts that are due within a year.

However, it is unclear how many of these debts are due for repayment.

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