KUALA LUMPUR, Sept 30 — Tan Sri Dr Zeti Akhtar Aziz disagreed today that Malaysia is emerging as Asia’s weakest link, following reports that the weakening ringgit and a widening political scandal here could see foreign investors pulling out billions from the country’s bond markets this week.

Responding to a question on concerns of a contagion raised among Malaysia’s neighbours, the Bank Negara governor said these countries should first take a look at Malaysia’s financial standing.

“First, we have a surplus on our current account, secondly we have a very solid financial system, banking system, in particular, very well developed bond market.

“This growth, yes they have moderated but they are still growing at a rate that is still favourable given the global outlook, so these are all the factors that need to be given consideration,” she told reporters after giving a special address at the Malaysia-OECD High-level Global Symposium on Financial Well-being at Bank Negara here.

The Bank Negara governor admitted, however, that the oil-exporting country is in “some degree of uncertainty” because the global commodities crash, but said this was mitigated by its diverse economy of which 80 per cent is made up of manufacturing and services.

On whether the declining ringgit has affected imports and exports, she said the central bank has not detected an impact yet.

“It is now more demand conditions that are affecting our exports and imports but I’m sure there will be threshold levels where it might begin to have an impact,” she said without elaborating.

Zeti also said BNM could predict if the ringgit will continue its current decline, adding that it depended on whether the US Federal Reserve will raise interest rates and the direction of the energy and commodities markets.

“There is a lot of uncertainty and we have to demonstrate that we can live in that uncertainty and survive it and the point that I made is even if there are any setbacks, we have shown that time and again we have been able to recover from those setbacks quite quickly and this is what policy makers try to ensure that this will still hold even for periods like this,” she said.

Zeti then reiterated that the central bank will not peg the ringgit as prices or conditions might adjust in ways more harmful to the local economy than the currency’s decline alone.

The ringgit is currently trading around 4.45 to the US dollar.