BNM: Strong economic conditions to persist

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.