KUALA LUMPUR, April 9 — Bank Negara Malaysia (BNM) is focusing on broader economic tools beyond interest rates to mitigate the impact of newly imposed US tariffs, according to its governor Datuk Seri Abdul Rasheed Ghaffour.
Speaking to Bloomberg TV, Abdul Rasheed said Malaysia enters the tariff dispute from a position of strength, backed by robust investment, resilient domestic demand, and diversified trade partners, according to a report in The Edge today.
“Monetary policy cannot resolve trade wars. It’s not the best tool to do it,” he said, stressing that BNM’s mandate remains price stability to support sustainable growth.
US President Donald Trump’s recent tariffs include a 24 per cent levy on Malaysian exports, leading to concerns over growth and prompting traders to anticipate a possible 25-basis-point rate cut within six months.
Malaysia’s 2025 growth outlook has been revised downward by economists amid the implementation of the levy.
BNM has kept the policy rate at 3 per cent since May 2023.
In a separate interview with The Edge, Maybank’s CEO Datuk Khairussaleh Ramli said there is room for a rate cut, given current conditions.
Abdul Rasheed acknowledged continued volatility in the ringgit and said BNM is prepared to intervene when necessary, while stressing that any currency actions will be measured to maintain orderly markets.
Malaysia’s 2024 growth forecast of 4.5–5.5 per cent is now under review amid signs of an economic slowdown, including weaker-than-expected industrial production in January.
The governor urged the government to double down on structural reforms to strengthen the economy and support the ringgit.
Although the central bank is reassessing its growth forecast, Abdul Rasheed said there’s no urgency to revise it yet as conditions remain “very much fluid”.
BNM expects inflation to remain contained despite plans to raise petrol prices for the top 15 per cent of income earners by reducing RON95 subsidies, projecting consumer price growth at 2–3.5 per cent this year.
Efforts to encourage repatriation of foreign investment income and timely conversion of export earnings into ringgit will continue to bolster the currency, he added.
The ringgit, a top-performing emerging market currency earlier in 2024, has weakened in line with regional peers this month.
Prime Minister Datuk Seri Anwar Ibrahim has pledged to lead a coordinated South-east Asian response to the US tariffs, with Malaysia currently chairing Asean.
The region was broadly affected by the new tariffs, with Indonesia facing a 32 per cent levy, Vietnam 46 per cent, the Philippines 17 per cent, and Singapore 10 per cent.
