Malaysia is not “as concerned” about investors pulling out of the country in a big way when the U.S. Federal Reserve starts winding down its asset purchases, the Malaysian finance minister told CNBC on Monday.

Tengku Zafrul Aziz, the finance minister, said Malaysia’s financial markets are “insulated” as the country has raised most of its debt locally. The government increased its statutory debt ceiling from 60% to 65% of gross domestic product to fund its Covid-related fiscal packages.  

“If you look at our borrowing exposure, 98% is actually ringgit-denominated,” Zafrul told CNBC’s “Squawk Box Asia,” referring to the Malaysian currency.

“So we’re not as concerned,” he added. “But having said that, of course there will be some effect as markets react accordingly in the U.S.”

The Southeast Asian country was among those that suffered a “taper tantrum” in 2013, when U.S. Treasury yields surged after the Fed said it would taper its quantitative easing program.  

The Malaysian economy is on track to grow by 3% to 4% this year, said Zafrul. But next year’s growth prospects would depend on whether the country could continue to open up, given the threat of the Covid omicron variant, the minister added.

“I’m quite optimistic that we are able to do what’s needed to be done,” said Zafrul. “Having said that, you never know right? So let’s prepare for the worst but at the same time, do not panic.”