KUALA LUMPUR: Former prime minister Tun Dr Mahathir Mohamad has questioned the necessity of maintaining national reserves in the form of US bonds, given the minimal returns received.

"Apart from the reserves held by Bank Negara amounting to more than RM500 billion, we have RM1 trillion investment assets with Employees Provident Fund (EPF), over RM300 billion assets under management in Permodalan Nasional Berhad (PNB), more than RM80 billion deposit savings with Tabung Haji and the pension fund, KWAP has almost RM150 billion.

"We have in fact more than RM1 trillion in savings.

"At the same time we have huge debts incurred during Najib's (Datuk Seri Najib Razak) tenure as prime minister and now the additional amounts in government funds for projects, subsidies and free gifts. We have a lot of debts," he said in a post on X today.

Dr Mahathir also criticised Malaysia for holding substantial savings but failing to use them to reduce the country's obligations, which now has exceeded RM1 trillion, and ease the financial burden.

He said it was difficult to retrieve the funds when they were invested in US bonds, as they had a reputation for not returning borrowed or deposited funds.

"So much of government funds had to be used to service the loans. This results in more deficits. The debts remain as a burden. We have to service the debts with several billions every year.

"Why must we hold so much money as reserves in the US? Why must we have so much money as reserves? These are the questions that the government must ask itself," he added.

https://www.nst.com.my/news/nation/2023/10/968644/dr-m-questions-need-us-bonds-national-reserves-due-minimal-returns