The Edge Weekly - No Room for Error

It is a snippet of an interview of Nazir:

·         Us recovery and QE tapering is real, this could cause tail-spin in Malaysian capital market but it is manageable.

·         Outflow of capital is manageable will not create chaos

·         Fortunately, Malaysia remain to have positive CA, ie we did not overspent when dollar is cheap

·         India and Indonesia have twin deficit ie fiscal and CA deficit

·         But Malaysia’s pro-long fiscal deficit and high level of national debts (55% GDP) pose a down-grade risk to the country

·         Malaysia – a high saving nation

·         Malaysian foreign currency denominated debts is low

·         BNM forex reserve is also high ~ RM140B enough to cushion out flows of US30B foreign investment in bond

·         Outflows of foreign funds does not pose major threat to Malaysia

·         But the local funds may exit the country if the confidence level slide down

·         Major local funds are EPF, PNB and KWAP remain faithful to the country

·         But private funds from HNI and corporate may move out the country

·         News and sound bites that Malaysian is investing overseas properties

·         Political stability should not be taken for granted. Country with stable politic outlook able keep foreign investment longer.

·         On overcoming corruption and strengthening transparency – to strengthen MACC and practice amnesty – let the bygones be bygones.