BNM: Strong eco­nomic con­di­tions to per­sist

The Sun (Malaysia) - - SUNBIZ -

PETALING JAYA: Bank Ne­gara Malaysia gov­er­nor Tan Sri Muham­mad Ibrahim said strong eco­nomic con­di­tions are ex­pected to per­sist de­spite ex­pected short-term volatil­ity in the af­ter­math of a change in govern­ment.

“Malaysia is no stranger to short­term volatil­ity given that we are an open econ­omy that is highly in­te­grated with global mar­kets. Our ex­pe­ri­ence tells us that we must be care­ful not to over­re­act to mar­ket noises, es­pe­cially when it is caused by fac­tors which are tem­po­rary in na­ture.

“The neg­a­tive but much re­duced in­flu­ence of the NDF (non-de­liv­er­able for­ward) mar­ket should not de­tract the ring­git move­ments over the longer term,” he said dur­ing his ad­dress at the 2018 Asian In­sti­tute of Char­tered Bankers grad­u­a­tion cer­e­mony on Satur­day.

Muham­mad ex­plained that in the medium and long term, the ring­git will re­flect Malaysia’s strong eco­nomic fun­da­men­tals and the strength can be seen from the cur­rent ac­count sur­plus, a strong re­serves po­si­tion, low level of ex­ter­nal in­debt­ed­ness and strong cap­i­tal buf­fers in the bank­ing sys­tem.

“We ex­pect th­ese strong con­di­tions to per­sist. As many of you here can tes­tify, our fi­nan­cial sys­tem is re­silient and ro­bust. On nu­mer­ous oc­ca­sions over the past decade, we have been able to man­age mar­ket volatil­ity in our stride. To a large ex­tent, this was due to the con­tin­u­ous mea­sures taken over the years to de­velop our fi­nan­cial mar­kets.

“Our mar­ket now is bal­anced, deep and liq­uid to pro­vide the struc­tural sup­port for or­derly mar­ket con­di­tions,” Muham­mad said.

The Mone­tary Pol­icy Com­mit­tee of Bank Ne­gara Malaysia last thurs­day reaf­firmed that the out­look of the Malaysian econ­omy re­mains strong, healthy and ro­bust.

Bank Ne­gara will con­tinue to en­sure or­derly con­di­tions in the on­shore fi­nan­cial mar­kets, he added.

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