He said the corporate sector, comprising financial institutions, government-linked investment companies, and GLCs, has investments abroad and generates income from their foreign investment.
“We are not asking them to liquidate their assets, but BNM is encouraging them to bring back the realised profits and convert them into ringgit,” he told reporters on the sidelines of the BNM-organised Sasana Symposium 2024.
At the panellists session themed “Weathering Global Challenges: Buffers Against External Vulnerabilities”, Marzunisham said Malaysia had maintained a current account surplus for the past five years, including holding of foreign assets by corporate and financial institutions.
“They can use this foreign holding to meet their financial obligations and this will significantly reduce the need to come to the central bank for foreign currency,” he said.
The session was timely with Malaysia’s international reserves adequacy, which has gained increasing attention in the media and among analysts in recent periods, particularly against the backdrop of the strengthening US dollar.
Focussing on the international reserves of BNM, he said the country’s reserves remained resilient due to the level of external debt to the gross domestic product being manageable.
“One-third of the external debt is in the form of ringgit and we are not exposed to foreign currency fluctuation, with less than 3% of government debt in foreign currencies and almost 96% of government debt in ringgit,” said Marzunisham.
Meanwhile, Asean+3 Macroeconomic Research Office group head and principal economist Runchana Ponsaparn said Asean economies are well prepared financially, particularly in terms of international reserves.
“We have a low public debt and at the same time, our banking system has already built a significant buffer in terms of capital and liquidity.
“Despite being hit by Covid-19 or even the trade tensions between the US and China, Asean remains resilient as we have a buffer, even though it is becoming thinner,” she said during the session.