Bank Negara foreign reserves at RM321b

Published: 2009/05/27

THE international reserves of Bank Negara amounted to RM320.7 billion as at March 31, 2009 and remained stable at RM321.5 billion as at May 15, 2009.The reserves position is sufficient to finance 8.3 months of retained imports and is 3.8 times the short-term external debt.

Meanwhile, when asked if Malaysia was in a recession, Zeti said: "We always look at two quarters of negative growth as recession. But it is not constructive to look at it this way."She said it must be looked at from whether Malaysia had the prospect of coming out the economic downturn.

"Yes, it does (to come out of the downturn). We are not facing a financial crisis and we are not over-leveraged," she said. "Stability has emerged in the labour market, commodities and the stock market and that a decline in inflation would improve the purchasing power," she said.

Together with the stimulus package, there are prospects for full positive growth going into the final quarter of the year and going into 2010, she said. Asked on Malaysia's strategy to counter the budget deficit, Zeti noted that the state intervention was only temporary and that the government would slowly exit from the massive stimulus while the private sector would enhance its role in the economy.

"For others (countries), where they have to repair their financial systems, they are providing life support. But for us, it is providing support to the economy rather than to the financial system, because our financial system is not facing a crisis," she said adding that none of the Asian financial systems were facing a financial crisis.

Zeti added that the private sector will continue to be the main driver of the economy and that was why it was imperative for financial institutions to continue providing financing.She said the banks in Malaysia were well capitalised and have shown a high degree of resilience with no financial stress, and that non performing loans were stabilised at 2.2 percent. - Bernama