Glcs Glics Not Forced To Repatriate Foreign Earnings To Prop Up Ringgit

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Second finance minister Amir Hamzah Azizan said that the ringgit topped other regional currencies since the government implemented coordinated measures to bring money into the foreign exchange market.KUALA LUMPUR: The government is not forcing government-linked companies (GLCs) and government-linked investment companies (GLICs) to repatriate their foreign earnings to help prop up the ringgit, said second finance minister Amir Hamzah Azizan.
Instead, Amir said the government had merely encouraged these companies to repatriate some of their profits from foreign investments.
“The government will not force GLICs (and GLCs) to repatriate their funds or (returns on) investments as it could affect the people and the economy,” he told the Dewan Rakyat.
“They will only be asked to do so when there is a benefit to the investment, and we have seen integrated efforts between GLICs and Bank Negara Malaysia (BNM) yielding results as the value of the ringgit has strengthened over the past week.
“When GLCs and GLICs are enjoying better profits from foreign investments, they can repatriate some of these investment profits, and we encourage them to do so.”
Amir was replying to a question from Radzi Jidin (PN-Putrajaya) about the impact of the government’s continued tapping into the Employees Provident Fund’s (EPF) foreign investments. The EPF is a GLIC.
Radzi claimed the continued repatriation of returns from EPF’s foreign investments might impact future dividends and the pension fund’s ability to explore new investments abroad.
Amir, the former EPF CEO, said that the EPF would periodically rebalance its investment portfolio in line with the government’s requirements, adding that investments were based on thorough evaluations which included checks on foreign currency exchange rates.
Earlier today, Amir told the Dewan Negara that the ringgit was in first place compared to nine other regional currencies since the government, BNM, GLCs and GLICs implemented coordinated measures on Feb 26 to bring money into the foreign exchange market.
“Among them are encouraging GLICs and GLCs to bring back foreign investment income and convert the income to ringgit more consistently,” he said.
Imbalance in diesel sale
Amir also revealed an imbalance in the sale of diesel when compared to the sale of diesel-powered vehicles and economic growth. He said the current subsidised diesel at RM2.15 per litre had encouraged smuggling, given its market rate of RM3.43 per litre.
He said this was evident from the 70% increase in diesel sales – from 6.1 billion litres in 2019 to 10.8 billion litres in 2023. The number of diesel vehicles only increased by less than 3%, and gross domestic product only increased by around 20%.
Amir said the uncertainty over global crude oil price caused the government to pay more in subsidies to keep prices low. The average price of global crude oil for 2023 was US$82.12 per barrel, higher than the 2023 budget estimate of US$80 per barrel.
He said these factors forced the government to pay RM9 billion more on top of an RM25.6 billion set in the budget. - FMT

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