Zeti: Ringgit in line with other currencies
Filed Under (Bank Negara) by Webmaster on 06-03-2009
Tagged Under : Bank Negara, interest rate, Zeti
The ringgit remains stable against other currencies and is flexible enough to respond when conditions warrant it, says Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz. “The ringgit is moving in line with other currencies, so it is now stable against other currencies,” she said after the launch of the Malaysian branch of PT Bank Muamalat Indonesia and its subsidiary First International Islamic Bank yesterday.
Asked whether it was significant that the ringgit was approaching 3.8 against the US dollar, the same level as the former peg against the greenback, Zeti said: “No. That is precisely why we have a flexible exchange-rate regime. When conditions change, the ringgit is able to respond and that is important.”
“We have already reduced interest rates from 3.5%. Now it is 2% and we believe that this is supportive of growth,” she said.
From left: A. Riawan Amin, special envoy of the President Indonesia Dr Alwi Shihab, Aambassador of Indonesia to Malaysia Tan Sri Prof Da’i Bachtiar and Tan Sri Dr Zeti Akhtar Aziz at the launch
“What is more important is access to financing. So, we are engaging with banks and monitoring the situation to ensure that borrowers have access to financing – that is the most important (factor) to support growth,” she said.
“We will only intervene to ensure orderly conditions but for most of the period, it has been functioning on its own,” she said, adding that the currency market remained orderly.
On a possible recession here, Zeti said this was much dependent on external developments. Zeti also said the current interests rates were supportive of economic growth. “We have already seen a decline in imports and a very significant decline in exports but so far, domestic demand has managed to keep us in positive territory.” She cautioned that conditions “remained highly volatile”. “So, we have to monitor them,” she said.
Earlier, Zeti said the current financial crisis was expected to accelerate the financial and economic integration in Asia.
“This should be viewed positively, not only towards the unwinding of the global imbalances but also because it has the potential to contribute towards global growth. The banking sector in Asean and the greater Asian region will have an important role in facilitating this trend,” she said.
