MALAYSIA is not heading towards an economic crisis, Finance Minister Tengku Zafrul Abdul Aziz told the Dewan Rakyat today.

According to Tengku Zafrul, the country is far from the situation faced during the 1997 Asian financial crisis.

“Since then, Bank Negara Malaysia (BNM) has implemented various economic reforms, such as a diverse economic structure supported by a well-capitalised economic system,” Tengku Zafrul said.

“The financial markets are very open with high foreign investors participation. Our current accounts are performing well, driven by various exports.

“Our current account is positive with RM3 billion in the first quarter of the year and RM4.4 billion in the second quarter of the year.

“While we are facing several challenges due to factors outside our control, we are not heading towards an economy or currency crisis.”

Tengku Zafrul was answering questions from Wong Hon Wai (Bukit Bendera-PH).

At the height of the Asian financial crisis, Malaysia’s economy contracted by 7.4%.

“If we look back, our currency fell by 54% to 4.88 against the US dollar. The stock exchange was also impacted, the KLSCI fell 800 points in two months.

“Our current account deficit was RM16.7 billion at the time and BNM increased the interest rate to 11% to manage the depreciation of the ringgit and to curb inflation,” Tengku Zafrul said.

Ahmad Maslan (Pontian-BN) asked how the stock and bond markets are performing, to which Zafrul replied there has been no disruption, despite the KLSCI contracting by 11%, falling 1,400 points.

“In Malaysia, the stock market still recorded foreign investments of RM6.6 billion, while fundraising activities were strong at RM7.2 billion at the end of September,” he said.

“The bond market is strong, reaching RM70 billion at the end of August, while the government bond market stood at RM119 billion.” – October 4, 2022.