KUALA LUMPUR: Finance minister Tengku Zafrul Aziz has rejected talk that Malaysia owes a lot of money to Indonesia.
He said it was not true, as only 2.5% of federal government debts are foreign-denominated, and are held by institutions and investors from around the world.
Among them were investors and institutions in the US, Europe, Japan, China, and Singapore.
“So the 2.5% in foreign loans cannot all be from Indonesia, it’s not logical. And the remaining 97.5% of the national debt is in domestic loans,” he said in a video posted on Twitter today.
Tengku Zafrul said government borrowings are different from the loans taken by individuals.
“One of the ways governments borrow money is through a bond issuance whereby investors will make bids for the rate of return or yield, as well as the amount wanted.
“Investors who bid the lowest rate of return but with the highest loan amount will be selected,” he said, adding that it was rare for a country to take a direct loan from another country. - FMT
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