NEW YORK: Malaysia will not impose any form of capital controls nor peg the ringgit's exchange rate to any other currency despite the strong economic headwind it is facing.
Prime Minister Datuk Seri Najib Razak, assured groups of both portfolio fund managers and direct investors here that his administration will instead shore up the domestic economy and continue to attract investments.
Najib who is leading the Malaysian delegation to the 70th Session of the United Nations General Assembly said this when opening a breakfast meeting between representatives of several US fund managers and the Malaysian business delegation organised by Invest Malaysia 2015 and the Malaysian Industrial Development Authority.
He painted a realistic picture of the Malaysian economic outlook, saying the weakening oil and commodities prices has made it necessary for the government to revise downwards its projections as well as the 2015 budget to reflect prevailing global conditions.
"We are committed to achieve a balanced budget by 2020 but I have to be frank with you that we may not achieve a fully balanced budget but may be a slight deficit in the region of negative 1 per cent from the current deficit of 3.2 per cent," he said.
Najib however said of more importance was that Malaysia is moving positively in the right direction.
"So we do make some internal adjustments but I would like to reiterate that we will not impose capital control measures or peg the ringgit," he said.
Major infrastructure projects such as the Kuala Lumpur mass transit system, the Pan Borneo Highway, the Kuala Lumpur-Singapore High Speed Rail and the Petronas Rapid Penggerang project will continue as planned.
Najib also said the political pressures being piled up on his administration at home should not be of concern to the American fund managers and investors.
"There is political stability in Malaysia. We are a mature democracy and we allow differing views as long as our multi-racial and multi-ethnic fabric is not threatened," he said.
Najib also touched on the now beleaguered strategic development fund, 1Malaysia Development Bhd (1MDB), saying the fund will sort out its financial issues as promised, before end of this year.
Najib said 1MDB was expected to cut its debts further by a significant RM16 billion very soon.
Speaking at a luncheon later, Najib also said Malaysia was advancing well into becoming a high income nation.
He also said the Trans-Pacific Partnership Agreement strongly proposed by the US will enhance trade within the Pacific economies but Malaysia has to study details of the agreement carefully.