KUALA LUMPUR, Sept 17 ― Companies are not likely to rush to downsize their workforce as they have already invested in their employees, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz said.

“Even during the Asian financial crisis, they scaled down operations, requiring people to work fewer hours, and tried to keep their staff for as long as possible as they had already invested in training and developing them,” she was quoted saying in an exclusive interview with local daily New Straits Times (NST).

The central bank governor was asked to comment on worries of retrenchment as companies experience lower profits and Malaysians have lower spending power, owing to inflation and price hikes after the Goods and Services Tax (GST)’s roll-out in April and the depreciating ringgit.

Zeti acknowledged that some firms are trying to make their businesses more efficient by letting some of their staff go, but saw it as an opportunity for Malaysians to be retrained or start their own businesses.

She pointed to the early 2000s as an example where over 4,000 Malaysians had to leave the banking sector that was then undergoing a consolidation and merger period.

“Did it lead to devastation? It didn’t; we recovered within one and a half years from that crisis and people found other things to do. Either they started their own businesses or were retrained and went into other lines of business,” she said.

“So, the way I see the role of the government is to look at how they can ensure that growth is sustained during this kind of period. While we are enduring all this volatility, our focus should be on growth,” she said.

Zeti had in the same interview expressed confidence that Malaysia is not heading towards a financial crisis as the country has a strong financial system and strong economic fundamentals such as low unemployment rates.

She acknowledged the challenging economic times that the nation is facing, but noted that much of it is beyond Malaysia’s control, with the ringgit and 120 other currencies weakening against the US dollar.

She also pointed out that Malaysia ― a net exporter of petroleum and commodities producer ― had experienced a greater fall in currency value against the greenback like other countries in the same category.

She added that “some domestic issues that have affected sentiment and confidence” will need to be resolved to then contribute to the ringgit’s recovery.

“Our track record has shown that every time we have been set back, time and again, we have been able to bounce back. It is more than once. We bounced back, and we bounced back quickly,” she said.