Guan Eng: Weakening ringgit widens debt bill

 

Putrajaya has been urged to explain how the government intends to deal with a ballooning foreign debt bill due to an increasingly weak ringgit.

In a statement today, DAP chairperson Lim Guan Eng said the ringgit was inching closer towards the RM4.50 mark to the US dollar.

Lim, a former finance minister and Penang chief minister, warned that the weaker ringgit would cost Malaysians much more to finance foreign-denominated loans.

Citing the RM5.3 billion sukuk bond issued by Putrajaya in April 2021 when the US dollar was RM4.12, Lim said if the current exchange rate (RM4.45 to the US dollar) remains unchanged by 2052, then Malaysia would have to repay RM8.6 billion in principal plus interest.

More worryingly, said Lim, are the three US dollar-denominated bonds totalling US$7.5 billion that would mature in the next two years.

Lim noted that the bonds were issued when the ringgit was RM3.35 to the US dollar.

"At the exchange rate of RM4.45 to the US dollar, the principal amount due for the US$7.5 billion would be higher at RM29 billion or RM7.2 billion more.

"A weaker ringgit this year means that the annual interest cost is closer to RM1.5 billion instead of RM1 billion," he said. - Mkini