KUALA LUMPUR, Sept 18 — Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz strongly believes that there continues to be a growth story in Malaysia despite the current challenging period.
Speaking to the New Straits Times in an exclusive interview published today, she said the economy was now better prepared to bounce back from any setback triggered by external developments given its solid financial system.
“The world is experiencing volatilities for more than one year now.
“Actually, the reversal in capital flows began in September 2014 and despite that, we are growing by between four and five per cent, which is favourable as world trade has slowed.
“Our banks are still lending. There is no disruption on the lending activities by the banking system,” she said.
Zeti also highlighted that the economic condition now was far better compared with the situation during the 1998 Asian financial crisis.
She said Malaysia’s current account was now in surplus with reserves level able to finance 7.4 months of retained imports while at that time it was deficit around five per cent with reserves level at only three months.
Zeti said the country now has a more developed bond market, which was now 110 per cent of gross domestic product.
“Before, it was only 35 per cent. This has helped to diversify and spread out the effects of the volatility on our financial system,” she said.
She said the US was already on a recovery path and any movement in interest rates would not derail its growth process due to its improved underlying fundamentals, lower unemployment level and higher consumption spending.
“That would be positive for us because they are our second largest trading partner, however, this has been made difficult by the unstable conditions currently prevailing in the international financial markets,” she said. — Bernama
