Hello Malaysian Media, Zafrul Has NOT Answered The Question. What Is The Exact Debt Service Coverage R.A.T.I.O. NOW, TODAY, AT THIS MOMENT ?

 Here is 

 

https://www.msn.com/en-my/news/national/debt-to-gdp-ratio-to-cross-60-by-end-of-october/ar-AAPmTvE?ocid=msedgntp

• KL : country’s statutory debt to GDP ratio more than 60% by end Oct
• Zafrul said 2021 debt service coverage ratio RM39b, 2022 RM43.1 b
• for every RM1 revenue we have to pay 18 sen interest

OSTB : Hello Malaysian Media and Tengku Zafrul - this IS NOT A RATIO. Do not hide information. 

2/3 is a ratio. 3/4 is a ratio.  7/8 is a ratio. 5/16 is a ratio. 2:1 is a ratio. 4:1 is a ratio. 

RM50 is NOT a ratio. RM30 million is NOT a ratio. RM39 billion is also NOT a ratio. 

Debt service coverage ratio (DSCR) compares operating income available with debt servicing for interest, principal and lease payments. It is a benchmark used to measure the ability to produce enough cash to cover debt payments.

(OSTB : Hello Malaysian Media, so what is the DEBT SERVICE COVER RATIO? 

If the DSCR is 1:1 that means the government has committed suicide. It means for every RM1.00 of Revenue there is RM1.00 of HUTANG to be paid. No more money left over for development.

The bigger the DSCR the more healthy the government's finances. If the DSCR is 100:1 it means for every RM1.00 government revenue only 1 sen is needed to bayar HUTANG. 

But Tengku Zafrul says 

• for every RM1 revenue we have to pay 18 sen interest

this means that calculating interest payment alone the DSCR (interest only) is 100:18. THIS IS CALLED A RATIO. Tapi ini bayar bunga saja. Interest only.

Then you must add back principal payments.  How much are the total principal repayments per year?

Only then can you calculate the FULL DEBT SERVICE COVER RATIO.  This is what Zafrul is NOT telling us.)

The federal government also sought to increase the statutory debt limit from 60% to 65% of GDP.

(OSTB : Haiyya walau-eh,  exactly how much is that?  The Malaysian GDP is around RM1.4 TRILLION !! Or RM1,400 BILLION. 10% of that is RM140 Billion. 5% of that is RM70 Billion. 

So what it means is that they want to go from HUTANG 60%  of GDP (RM840 billion) to HUTANG 65%  of GDP  (RM910 billion). 

Ayyo mama. That is approaching almost RM1.0 Trillion !!

Can you imagine the amount of Government Bonds and Treasury Bills they will be issuing to borrow that extra RM70 billion?  

And listen carefully folks, this extra RM70 billion will not even be enough for 12 months. Next year they will need to borrow money again.

Each time they issue Government Bonds it will affect the Ringgit exchange rates, it will impact money market rates. People with knowledge of this information can make a killing on the money markets and the FOREX markets. Deyy, we know what you did last summer !! )

Zafrul said plan to reduce deficit by 2025 to 3%-3.5%

• replying Nga Kor Ming who said govt debt will hit RM1.3 trillion 
• Nga said each Malaysian indebted for RM40,000 
• Malaysia face lower credit rating if such debts continue
• Nga raised concerns over leakage and wastage of funds 
• Some projects not even 50% complete but 94% allocation used

Zafrul said RM45b monitored by govt, Pakatan Harapan MoU

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.