THE plunging ringgit will not have a high impact on Malaysia’s debt as only 5% of it is denominated in the dollar, Minister in the Prime Minister’s Department Mustapa Mohamed said today.

He was answering questions from Langkawi MP Dr Mahathir Mohamad on the effect of the depreciating ringgit on Budget 2023.

“Only 5% of government debt is in US dollar; a lot of it is denominated in ringgit,” Mustapa told the Dewan Rakyat.

“Treasury bills and government securities are also in ringgit.”

Mustapa said the ringgit is performing better than the Japanese yen and British.

“We know that the ringgit is determined by the open market so fluctuations are normal,” he said.

The deprecation of the ringgit is due to the aggressive measures of the US Federal Reserve to counter inflation, he said.

“According to Bank Negara Malaysia, the liquidity of local banks is good and our reserve stands at  US$1.6 billion, which is more than our short-term debts,” he said.

The ringgit retreated from last week’s gains to open lower against the US dollar today amid mixed market sentiments as investors continue to seek the safe-haven greenback.

At 9am, the local currency eased to 4.6400/6445 against the greenback from Friday’s close of 4.6360/6390.

Meanwhile, the ringgit traded mostly higher against a basket of major currencies.

It rose against the British pound to 5.1657/1707 from 5.1728/1762 last week, gained against the Japanese yen to 3.2049/2082 from 3.2103/2126, and appreciated versus the Singapore dollar to 3.2323/2359 from 3.2343/2368.