Abstract
MALAYSIA
Title Page
MALAYSIA
STAFF REPORT FOR THE 2022 ARTICLE IV CONSULTATION— INFORMATIONAL ANNEX
March 7, 2022
Prepared By
Asia and Pacific Department
Contents
FUND RELATIONS
STATISTICAL ISSUES
Fund Relations
(As of January 31, 2022)
Membership Status:Joined March 7, 1958; Article VIII
General Resources Account
| SDR Millions | Percent of Quota | |
|---|---|---|
| Quota | 3,633.80 | 100.00 |
| Fund holdings of currency (exchange rate) | 2,620.83 | 72.12 |
| Reserve tranche position | 1,013.00 | 27.88 |
| Lending to the Fund | ||
| New Arrangement to Borrow | 7.85 |
| SDR Millions | Percent of Quota | |
|---|---|---|
| Quota | 3,633.80 | 100.00 |
| Fund holdings of currency (exchange rate) | 2,620.83 | 72.12 |
| Reserve tranche position | 1,013.00 | 27.88 |
| Lending to the Fund | ||
| New Arrangement to Borrow | 7.85 |
SDR Department
| SDR Millions | Percent of Allocation | |
|---|---|---|
| Net cumulative allocation | 4,828.98 | 100.00 |
| Holdings | 4,307.30 | 89.20 |
| SDR Millions | Percent of Allocation | |
|---|---|---|
| Net cumulative allocation | 4,828.98 | 100.00 |
| Holdings | 4,307.30 | 89.20 |
Exchange Arrangement:
The de jure and de facto exchange rate arrangements are floating.
Malaysia maintains bilateral payments arrangements with 7 countries. The authorities have indicated that these arrangements do not have restrictive features.
The current foreign exchange administration (FEA) rules include prudential measures to promote monetary and financial stability while safeguarding the balance of payments position and value of the ringgit. The 2019 and 2020 Article IV Consultation Reports (IMF Country Reports No. 19/71 and No 20/57) list exchange rate measures that have been taken between December 2016 and December 2019.
In April 2021, the BNM announced further liberalization of the FEA policy aimed to improve business efficiency and provide flexibility for corporates in particular export-oriented industries to better manage their foreign exchange risk exposure.
The Malaysian authorities view remaining FEA rules as prudential in nature and necessary to ensure the availability of adequate information on the settlement of payments and receipts as part of the monitoring mechanism on capital flows. These controls do not contravene Malaysia’s obligations under Article VIII. Malaysia has accepted the obligations of Article VIII, Sections 2, 3, and 4, and maintains a system free of restrictions on the making of payments and transfers for current international transactions except for restrictions in place for security reasons notified to the Fund pursuant to Decision No. 144-(52/51).
Malaysia, in accordance with the UN Security Council resolutions implements the freezing without delay of funds and other financial resources, including funds derived or generated from property owned or controlled directly or indirectly by the designated individuals and entities. These measures are maintained for the reasons of national and international security and have been notified to the Fund pursuant to the IMF Executive Board Decision No. 144 (52/51). Malaysia also restricts any dealings or transactions with Israeli/Israel-related entities/individuals as well as in Israeli Shekel; however, since these restrictions affect the underlying transactions themselves, they are not subject to Fund jurisdiction under Article VIII, Section 2(b).
Article IV Consultation:
Malaysia is on the standard 12˗month consultation cycle. Staff discussions for the 2022 Article IV consultation were conducted on a virtual mission during January 24–February 09, 2022.
Financial Sector Assessment Program (FSAP) Participation:
Malaysia conducted its first FSAP in 2012 (IMF Country Report Nos. 13/52, 13/53, and 13/56–13/60).
Technical Assistance:
Fiscal Affairs Department (FAD): A mission on fiscal responsibility law took place in February 2020. A seminar on treasury management took place in February 2020. A workshop on tax revenue strategy and Medium-Term Revenue Strategy was held in January 2020. A mission on revenue mobilization strategy was conducted in January 2020. A joint workshop on tax policy with MOF was held in July 2016. A mission on expenditure review was conducted in December 2016. A Public Investment Management Assessment (PIMA) mission took place in May 2017. A seminar on treasury modernization was held in July 2017.
Legal Department (LEG): Missions were fielded in May and September 2011 to help draft a Centralized Asset Management Corporations Bill, in the context of a three-year project to assist Malaysia in implementing an asset forfeiture regime.
Monetary and Capital Markets Department (MCM): A mission on macrofinancial risk analysis and vulnerability analysis for corporate and financial institutions was conducted in October 2009. A workshop on monitoring financial risks was held in in May 2010. Technical assistance missions on stress testing capital markets were conducted in 2013. Technical assistance discussions on further options to deepen FX markets and on analyzing the role of the exchange rate in Malaysia’s economy were concluded in March 2021. Technical Assistance on Monetary Policy Modelling in the context of the operationalization of Integrated Policy Framework (IPF tools) has been ongoing since December 2021.
Statistics Department (STA): Technical assistance and training missions on Government Financial Statistics (GFS) were conducted in March 2017 and March 2018, respectively, and follow-up GFS technical assistance missions were conducted in March and December 2019. Follow-up GFS technical assistance meetings are scheduled to take place between March/April 2022.
Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT):
In November 2014, Malaysia’s AML/CFT regime was subject of an on-site assessment by the Asia Pacific Group on Money Laundering (APG) under the new methodology of the Financial Action Task Force (FATF), the global standard setter for AML/CFT. The Mutual Evaluation Report was published in September 2015. It concluded that overall Malaysia has a broadly robust legal AML/CFT framework with generally well-developed and implemented policies, but with a moderate level of effectiveness. The country developed an action plan to address the key deficiencies identified in the report. In February 2016, the FATF granted full membership to Malaysia based on its commitments to continue improving its AML/CFT regime. The FATF will continue to monitor the country’s progress through its enhanced follow-up process. In the Third Enhanced Follow-up Report (October 2018), Malaysia made progress in addressing the technical compliance deficiencies, but remained under the FATF’s enhanced follow-up process and will report back on progress made to strengthen its implementation of AML/CFT measures.
Resident Representative/Advisor: None.
Statistical Issues
(As of January 2022)
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision is adequate for surveillance. | |
| National accounts: The Department of Statistics Malaysia (DOSM) publishes annual and quarterly estimates of GDP, by the production, expenditure, and (annual only) income approaches, at current and constant 2015 prices, based on the 2008 SNA. The DOSM also disseminates annual estimates for gross disposable income, saving, and net lending for the economy, as well as supply and use tables. | |
| Price statistics: The monthly CPI and the PPI are available on a timely and comprehensive basis. A quarterly Services PPI and monthly building cost index are also published. In 2022 the weights of the CPI basket will be updated using 2019 as a reference year (instead of 2016), based on the results of the latest Household Income, Expenditure, and Basic Amenities Survey. The PPI weights are currently based on the 2016 Economic Census. The weights will be updated based on a new Economic Census that will be conducted once the COVID-19 crisis has abated. | |
| Government finance statistics: Adoption of accrual reporting is necessary to capture a consolidated view of both assets and liabilities. There is a need to improve the timeliness, detail, and availability of data on nonfinancial public enterprises (NFPEs), statutory bodies, and state and local governments. Dissemination of more detailed data on non-listed NFPEs’ assets and liabilities and domestic and foreign financing by type of debt instrument and holder would be desirable; efforts in this direction will require continued close collaboration among agencies, including the Ministry of Finance, the Department of Statistics Malaysia (DOSM), and Bank Negara Malaysia (BNM). There is also a need to disseminate more information on public private partnerships. | |
| Monetary statistics: The monetary and financial statistics (MFS) are available on a timely and regular basis and are broadly aligned to the Fund’s data needs. BNM compiles monetary statistics using the standardized report forms (SRFs) 1SR for central bank and 2SR for other depository corporations for publication in the International Financial Statistics. There is a need to improve the institutional coverage of the financial corporations, sectorization of the domestic economy, and classification and valuation of financial instruments to ensure full adherence to the IMF’s Monetary and Financial Statistics Manual and Compilation Guide. In addition, due to the growing importance of insurance corporations, pension funds, and other financial intermediaries in Malaysia, coverage of MFS should be expanded to include these institutions. | |
| Financial Soundness Indicators: The BNM reports the 13 core financial soundness indicators (FSIs) and five encouraged FSIs for deposit taking institutions on a quarterly basis for posting on the IMF’s FSI website. Financial Access Survey:BNM reports data on several key series and indicators of the Financial Access Survey (FAS), including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (SDGs). |
|
| External Sector Statistics:Department of Statistics Malaysia compiles and publishes quarterly balance of payments and international investment position (IIP) estimates in accordance with the sixth edition of the Balance of Payments and International Investment Position Manual. The authorities improved reporting the data with much more detailed items starting in 2018. Large positions in net errors and omissions have recently been addressed. | |
| II. Data Standards and Quality | |
| Malaysia subscribed to the Special Data Dissemination Standard (SDDS) on August 21, 1996, with metadata published on the Data Standards Bulletin Board (DSBB). Malaysia met SDDS specifications on September 1, 2000. Malaysia is currently using a timeliness flexibility option for general government operations. The latest Annual Observation Report for Malaysia is available on the DSBB. | No Data ROSC is available. |
| I. Assessment of Data Adequacy for Surveillance | |
| General: Data provision is adequate for surveillance. | |
| National accounts: The Department of Statistics Malaysia (DOSM) publishes annual and quarterly estimates of GDP, by the production, expenditure, and (annual only) income approaches, at current and constant 2015 prices, based on the 2008 SNA. The DOSM also disseminates annual estimates for gross disposable income, saving, and net lending for the economy, as well as supply and use tables. | |
| Price statistics: The monthly CPI and the PPI are available on a timely and comprehensive basis. A quarterly Services PPI and monthly building cost index are also published. In 2022 the weights of the CPI basket will be updated using 2019 as a reference year (instead of 2016), based on the results of the latest Household Income, Expenditure, and Basic Amenities Survey. The PPI weights are currently based on the 2016 Economic Census. The weights will be updated based on a new Economic Census that will be conducted once the COVID-19 crisis has abated. | |
| Government finance statistics: Adoption of accrual reporting is necessary to capture a consolidated view of both assets and liabilities. There is a need to improve the timeliness, detail, and availability of data on nonfinancial public enterprises (NFPEs), statutory bodies, and state and local governments. Dissemination of more detailed data on non-listed NFPEs’ assets and liabilities and domestic and foreign financing by type of debt instrument and holder would be desirable; efforts in this direction will require continued close collaboration among agencies, including the Ministry of Finance, the Department of Statistics Malaysia (DOSM), and Bank Negara Malaysia (BNM). There is also a need to disseminate more information on public private partnerships. | |
| Monetary statistics: The monetary and financial statistics (MFS) are available on a timely and regular basis and are broadly aligned to the Fund’s data needs. BNM compiles monetary statistics using the standardized report forms (SRFs) 1SR for central bank and 2SR for other depository corporations for publication in the International Financial Statistics. There is a need to improve the institutional coverage of the financial corporations, sectorization of the domestic economy, and classification and valuation of financial instruments to ensure full adherence to the IMF’s Monetary and Financial Statistics Manual and Compilation Guide. In addition, due to the growing importance of insurance corporations, pension funds, and other financial intermediaries in Malaysia, coverage of MFS should be expanded to include these institutions. | |
| Financial Soundness Indicators: The BNM reports the 13 core financial soundness indicators (FSIs) and five encouraged FSIs for deposit taking institutions on a quarterly basis for posting on the IMF’s FSI website. Financial Access Survey:BNM reports data on several key series and indicators of the Financial Access Survey (FAS), including the two indicators (commercial bank branches per 100,000 adults and ATMs per 100,000 adults) adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (SDGs). |
|
| External Sector Statistics:Department of Statistics Malaysia compiles and publishes quarterly balance of payments and international investment position (IIP) estimates in accordance with the sixth edition of the Balance of Payments and International Investment Position Manual. The authorities improved reporting the data with much more detailed items starting in 2018. Large positions in net errors and omissions have recently been addressed. | |
| II. Data Standards and Quality | |
| Malaysia subscribed to the Special Data Dissemination Standard (SDDS) on August 21, 1996, with metadata published on the Data Standards Bulletin Board (DSBB). Malaysia met SDDS specifications on September 1, 2000. Malaysia is currently using a timeliness flexibility option for general government operations. The latest Annual Observation Report for Malaysia is available on the DSBB. | No Data ROSC is available. |
Malaysia: Table of Common Indicators Required for Surveillance
(As of March 1, 2022)
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing is only available on an annual basis.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) a state and local governments.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A).
Malaysia: Table of Common Indicators Required for Surveillance
(As of March 1, 2022)
| Date of Latest Observation | Date Received | Frequency of Data6 | Frequency of Reporting6 | Frequency of Publication6 | |
|---|---|---|---|---|---|
| Exchange rates | 03/1/2022 | 03/1/2022 | D | D | D |
| International reserve assets and reserve liabilities of the monetary authorities1 | 12/2021 | 01/07/2022 | M | M | M |
| Reserve/base money | 12/2021 | 01/14/2022 | M | M | M |
| Broad money | 12/2021 | 01/14/2022 | M | M | M |
| Central bank balance sheet | 12/2021 | 01/14/2022 | M | M | M |
| Consolidated balance sheet of the banking system | 12/2021 | 01/31/2022 | M | M | M |
| Interest rates2 | 03/1/2022 | 03/1/2022 | D | D | D |
| Consumer price index | 01/2022 | 02/28/2022 | M | M | M |
| Revenue, expenditure, balance and composition of financing3—general government4 | 2020 | 10/29/2021 | A | A | A |
| Revenue, expenditure, balance and composition of financing3—federal government | 2021: Q3 | 11/30/2021 | Q | Q | Q |
| Stocks of central government and central government guaranteed debt5 | 2021: Q3 | 11/30/2021 | Q | Q | Q |
| External current account balance | 2021: Q4 | 02/11/2022 | Q | Q | Q |
| Exports and imports of goods | 12/2021 | 01/21/2022 | M | M | M |
| Exports and imports of services | 2021: Q4 | 01/21/2022 | Q | Q | Q |
| GDP/GNP | 2021: Q4 | 02/11/2022 | Q | Q | Q |
| Gross external debt | 2021: Q4 | 02/11/2022 | Q | Q | Q |
| International Investment Position | 2021: Q4 | 02/11/2022 | Q | Q | Q |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing is only available on an annual basis.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) a state and local governments.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A).
Malaysia: Table of Common Indicators Required for Surveillance
(As of March 1, 2022)
| Date of Latest Observation | Date Received | Frequency of Data6 | Frequency of Reporting6 | Frequency of Publication6 | |
|---|---|---|---|---|---|
| Exchange rates | 03/1/2022 | 03/1/2022 | D | D | D |
| International reserve assets and reserve liabilities of the monetary authorities1 | 12/2021 | 01/07/2022 | M | M | M |
| Reserve/base money | 12/2021 | 01/14/2022 | M | M | M |
| Broad money | 12/2021 | 01/14/2022 | M | M | M |
| Central bank balance sheet | 12/2021 | 01/14/2022 | M | M | M |
| Consolidated balance sheet of the banking system | 12/2021 | 01/31/2022 | M | M | M |
| Interest rates2 | 03/1/2022 | 03/1/2022 | D | D | D |
| Consumer price index | 01/2022 | 02/28/2022 | M | M | M |
| Revenue, expenditure, balance and composition of financing3—general government4 | 2020 | 10/29/2021 | A | A | A |
| Revenue, expenditure, balance and composition of financing3—federal government | 2021: Q3 | 11/30/2021 | Q | Q | Q |
| Stocks of central government and central government guaranteed debt5 | 2021: Q3 | 11/30/2021 | Q | Q | Q |
| External current account balance | 2021: Q4 | 02/11/2022 | Q | Q | Q |
| Exports and imports of goods | 12/2021 | 01/21/2022 | M | M | M |
| Exports and imports of services | 2021: Q4 | 01/21/2022 | Q | Q | Q |
| GDP/GNP | 2021: Q4 | 02/11/2022 | Q | Q | Q |
| Gross external debt | 2021: Q4 | 02/11/2022 | Q | Q | Q |
| International Investment Position | 2021: Q4 | 02/11/2022 | Q | Q | Q |
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes, and bonds.
Foreign, domestic bank, and domestic nonbank financing is only available on an annual basis.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) a state and local governments.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A).