KUALA LUMPUR: The discussion on implementing targeted subsidies for RON95 is "actively ongoing" at the government level, Prime Minister's Office (PMO) senior director of economics and finance Nurhisham Hussein.
He added that the rationalisation of RON95 subsidies was a concern for many investors, but for now, no final decision had been made on when and how it would be implemented.
"No official decision has been made regarding any parameters. It is still under active discussion within the government.
"So, at this moment, I cannot give any solid indications on how or when we will start the (subsidy rationalisation) for RON95 petrol," he said during a virtual panel discussion at the MARC Ratings Bhd Malaysian Bond and Sukuk Conference 2024 today.
Nurhisham also said the implementation of
the targeted diesel subsidy has been widely accepted and its impact on businesses appears to be manageable.
He noted that since its implementation a few months ago, there had been no significant impact on the inflation rate, as the affected segments had received assistance.
"The most important aspect is that the implementation of the targeted diesel subsidy has significantly succeeded in curbing diesel smuggling and leakages in the country.
"We have substantial evidence that diesel smuggling and leakages have been almost entirely eliminated," he said.
Commenting on the fiscal deficit target, Nurhisham said the government was committed to achieving the medium-term target.
He emphasised that the implementation of subsidy rationalisation does not affect the deficit level, rather, it is more about government revenue being allocated for expenditure that impacts the people.
Meanwhile, Asean+3 Macroeconomic Research Office (AMRO) group head and principal economist Dr Runchana Pongsaparn said there are various positive factors that will continue to support the momentum of the ringgit going forward.
This included the coordinated efforts by the government and Bank Negara Malaysia to encourage a continuous inflow into the foreign exchange market.
She also noted that sentiment towards Malaysia was seen as better compared to last year, with the implementation of government policies such as the New Industrial Master Plan and the entry of foreign direct investment into the country.
"Fiscal discipline is important to support the ringgit, but it is not the only factor. There are various domestic and external factors supporting the ringgit.
"Interest rate differentials, market sentiment, economic growth performance, political conditions, and institutions also support the local currency," she said at the panel discussion.
Runchana said on top of this, the coordinated efforts by the government and Bank Negara with government-linked companies and government-linked investment companies.
This is alongside engagement with corporate companies, exporters and investors, which continue to support the ringgit.
She noted that Malaysia's favourable economic prospects also support the ringgit's performance against the US dollar.
Manulife Insurance Bhd director/head of investment Amar C. Ramachandran expects the ringgit's strengthening to continue due to the anticipated reduction in US interest rates by the Federal Reserve (Fed) at its monetary policy meeting next month.
He said there is an expectation that the Fed will reduce interest rates by 50 basis points at that meeting and by 125 basis points for the year.
He also added that structural reforms and fiscal sustainability will be good news for the investment community.
As of 12 noon today, the ringgit stood at RM4.3770 against the US dollar for today's trading session. This marks its highest level since February 2023.
https://www.nst.com.my/business/economy/2024/08/1094659/petrol-subsidy-rationalisation-talks-actively-ongoing-no-decision
Created by savemalaysia | Aug 21, 2024
Created by savemalaysia | Aug 21, 2024
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Created by savemalaysia | Aug 21, 2024
Created by savemalaysia | Aug 21, 2024