Bank Negara Malaysia (BNM) deputy governor Abdul Rasheed Ghaffour said that in terms of retirement savings, however, the buffer needed to be strengthened and rebuilt.
“That is why the labour market reform is critical in ensuring that people have better jobs, better income so that they could save further to increase their financial buffers in terms of retirement savings,” he said in a webinar organised by the Malaysian Economic Association.
He said the reform measure in social protection is also important, particularly with regard to social insurance and private retirement schemes, as it could help in strengthening further retirement benefits.
On the i-Sinar withdrawal impact on the financial market, he said BNM’s focus has always been to mitigate the potential impact arising from market destruction to ensure sufficient liquidity onshore to support financial stability.
“The debt and liquidity of the onshore financial market had been an important factor in ensuring adjustment had been made broadly and orderly, underpinned by healthy year-to-date daily trading volumes in the forex and bond market,” he said.
MIDF head of research Imran Yusof said he also viewed the i-Sinar withdrawal, particularly the blanket one, as positive to the real economy.
He said the withdrawal also won’t impact EPF’s liquidity, which he described as one of the big players in the equity market and has sufficient liquidity to support the market.
“It (EPF) also has a very diversified portfolio in terms of investment such as fixed income, stock market and properties,” he said.
He said the withdrawal of blanket i-Sinar had also resulted in additional cash in the pockets of those who do not really need the assistance.
“One thing that we noted last year when the blanket loan moratorium was given out was the spare money for those who do not really need them was either being consumed or invested.
“We saw retail participation in the stock market come back in a big way last year. The trend seemed to continue this year as the year-to-date, net buying from retailers amounted to about RM5 billion,” he said.
Meanwhile, Amundi Malaysia chief investment officer for fixed income Eridani Tutiana Jusat said although the i-Sinar withdrawal impact is positive for the local economy, she remained cautious about its impact on the domestic bond market.
“We are a bit cautious because EPF is a big investor in Malaysian government bonds. If there is less support from the EPF on the bond market, this will weigh on the market,” she said.
As of March 14, EPF paid out a total of RM52.48 billion to 5.94 million members under the i-Sinar scheme.