KUALA LUMPUR, March 11 — Various financial reforms undertaken by Bank Negara Malaysia (BNM) to strengthen financial institutions have put Malaysia on a solid platform that has enable its economy to remain stable despite external headwinds.
“Otherwise, we will be very vulnerable to (the headwinds), like the oil price decline. If we didn’t have policies to strengthen our financial institutions then, we will be in great difficulty,” BNM governor Tan Sri Dr Zeti Akhtar Aziz said.
Hence, the current overnight policy rate (OPR) of 3.25 per cent remains supportive of the economy and its core, she said when asked on the central bank’s decision to keep the key rate unchanged unlike others in the region such as Indonesia which has reduced its interest rate twice this year.
The central bank last raised the OPR by 25 basis points on July 10, 2014.
Zeti said Malaysia’s economy was still growing and factors affecting growth were now transitionary.
“We will go through a period of adjustment for one or two years or more and we should be able to resume our growth. We have the underline foundation,” she told reporters on the sidelines of the Wharton Global Forum 2016 here today.
At the second Monetary Policy Committee meeting on Wednesday, BNM said that the overall domestic financial conditions remained relatively stable since the previous meeting in January.
The financial system continues to be sound with financial institutions operating with sufficient liquidity buffers while the growth of financing to the private sector also remains healthy, it said. — Bernama
