Finance minister: Putrajaya mulling more fiscal stimulus as parts of country enter MCO 2.0

13-Jan-2021 Intellasia | Malay Mail | 6:02 AM Print This Post

Putrajaya could roll out more fiscal stimulus to keep the country’s economic recovery on track, Finance minister Datuk Seri Tengku Zafrul Abdul Aziz said today amid growing concerns that a second lockdown could hamper efforts to contain the Covid-19 fallout.

“There is sufficient domestic liquidity to support any additional fiscal stimulus to support lives, livelihoods and businesses, if necessary,” Zafrul said in a statement issued this evening.

“In fact, the Ministry of Finance has begun considering various measures to support the rakyat and businesses during this period. We will not compromise on the rakyat and businesses’ well-being,” he added.

Embattled prime minister Tan Sri Muhyiddin Yassin yesterday issued a new movement control order (MCO) for six states starting midnight tomorrow and announced the proclamation of Emergency at 11am this morning in a surprise move that solicited mixed reactions.

The Pagoh MP said the drastic actions are crucial to stem the Covid-19 pandemic although his critics alleged the laws were evoked to help Muhyiddin fend off a strong political challenge to his premiership.

Economists polled by Malay Mail expect the return of the MCO to dent Malaysia’s economic recovery severely.

Putrajaya has remained optimistic that the country can weather any volatility that may arise from tighter movement restrictions.

Zafrul said Malaysia has a resilient capital market ecosystem supported by ample liquidity alongside and proper market management measures in place to manage shocks.

The capital market will remain open throughout the Emergency and lockdown period to support and facilitate trading and investment with all regulatory functions in place, the minister stressed.

“The continued operations of the capital market are important to support the resilience and recovery of the Malaysian economy, as well as help investors manage their risks and opportunities during this period,” he said.

“Clearing funds, margins and deposits arrangements are also in place to manage clearing and settlement risks.”

Financial institutions and markets will also continue as usual, with services remaining available and accessible to borrowers, the minister stressed.

“Bank Negara Malaysia will actively monitor conditions in the financial markets to ensure that there is sufficient liquidity in the foreign exchange, bond and money markets; and that market conditions remain orderly,” he said.

The Muhyiddin administration rolled out stimulus packages worth RM305 billion (US$75 billion) in 2020 in response to the Covid-19 crisis and a record federal budget valued at RM322.5 billion for this year.

Zafrul said Malaysia’s “economic fundamentals” remain strong to enable an effective response to the pandemic.


Category: Malaysia

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