Malaysia’s overall external debt is RM1.2 trillion (2023). The bulk (67%) is foreign currency denominated. That’s a surprise! According to BNM, they are well managed and corporate/banks are resilient. Having said that, in a severe storm like 1997/98, we are at the mercy of foreign debt-holders.
In terms of reserves, it’s better than the days of the Asian Financial Crisis, but USD114.3 billion is not sufficient to meet a sustained “attack” on the currency. Singapore’s reserves are three times ours. And their monetary policy is focused on exchange rate not interest rate. That explains the Singapore dollar being 3.5x ours. We got to rethink in a dynamic economic landscape and produce more meaningful measures.
Reference:
BNM Annual Report, 2023
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