Bank Negara reforms put Malaysia on solid footing, says Zeti

Bank Negara governor Tan Sri Zeti Akhtar Aziz says factors affecting economic growth are transitionary. – The Malaysian Insider file pic, March 11, 2016.Various financial reforms undertaken by Bank Negara Malaysia to strengthen financial institutions have put Malaysia on a solid platform that enabled the economy to remain stable despite external headwinds.

"Otherwise, we will be very vulnerable to (the headwinds), like the oil price decline. If we didn't have policies to strengthen our financial institutions then, we will be in great difficulty," Bank Negara governor Tan Sri Zeti Akhtar Aziz said.

The current overnight policy rate (OPR) of 3.25% remains supportive of the economy and its core, she said when asked on the central bank's decision to keep the key rate unchanged, unlike others in the region such as Indonesia which has reduced its interest rate twice this year.

The central bank last raised the OPR by 25 basis points on July 10, 2014.

Zeti said Malaysia's economy was still growing and factors affecting growth were now transitionary.

"We will go through a period of adjustment for one or two years or more and we should be able to resume our growth. We have the underline foundation," she told reporters on the sidelines of the Wharton Global Forum 2016 today.

At the second Monetary Policy Committee meeting on Wednesday, Bank Negara said the overall domestic financial conditions had remained relatively stable since the last meeting in January.

The financial system continues to be sound with financial institutions operating with sufficient liquidity buffers while the growth of financing to the private sector also remains healthy, it said. – Bernama, March 11, 2016.