Business

Saturday November 14, 2009

Bank Negara to support private sector growth

By NELSON BENJAMIN


SINGAPORE: Bank Negara is focusing on the cost of financing and access to financing from both the banking sector and capital market to support private sector growth.

Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said Malaysia’s monetary policy was to support economic recovery and the present interest rates in the country were appropriate.

“What is important is that our financial system has not been affected by the crisis. Our economy is still resilient.

“Credit flows have been consistent and steady. Our financial market especially the bond market is one of the most developed in the region and this raises the opportunity for funds as well,” she said on the sidelines of the Apec CEO Summit here yesterday.

On the Prime Minister Datuk Seri Najib Abdul Razak’s goal of 5% economic growth next year, Zeti said it was achievable but did not want to speculate on the number as the international environment was still very uncertain.

“This is because our economy is still open but by strengthening domestic demand both in consumption and investment, it will raise the potential,” she said, adding that the country’s third-quarter results – expected to be announced within two weeks – would show a significant improvement from the second quarter.

“We have a high degree of confidence that the fourth quarter will be positive,” she said.

Asked the weak dollar was having an effect on Asean currencies, Zeti said Bank Negara did not look at volatility when determining the potential of the economy.

“Central banks look for orderly market conditions and we do not like excessive movements in a short period of time. Our business sector has shown that it can work with different levels of exchange rate,” she said.

On the new licences to be given to foreign banks to operate in Malaysia, Zeti said there had been healthy interest and the announcement on this would be made by the first half of next year.

The deadline was Oct 31 for applications for six new licences – two for commercial banks, two for Islamic banks and another two for takaful – that will be given out this year to foreign financial institutions. Another three commercial banking licences will be issued in 2011.

Asked how many applications had been received and country of origin, Zeti would only say: “The numbers have been healthy.”

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