Stay The Course, Strengthen Economic Fundamentals And Policy Buffers - BNM Governor
KUALA LUMPUR, March 31 (Bernama) – Strengthening economic fundamentals and policy buffers amid uncertainties to global trade are crucial tools to ensure continuous growth and, in the process, guarantee the well-being of the rakyat, said Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour.
He said by improving fiscal sustainability and attracting quality investments, there is space to further advance much needed urgent reforms for social protection and the labour market.
“These reforms may involve some short-term adjustments, but they are necessary to ensure that growth is more inclusive and benefits the rakyat – including generations to come,” he said in the Bank Negara Malaysia Annual Report released here today.
The central bank predicted Malaysia’s Gross Domestic Product to grow between four per cent and five per cent in 2026 as Malaysia’s domestic resilience and diversified export structure provides us with a solid foundation to navigate current external headwinds.
Malaysia’s path to becoming a developed, high-income nation must be paved with shared prosperity.
“We must build an economy that creates better paying jobs, supports our households and businesses, and remains resilient for decades to come,” said the governor.
Abdul Rasheed said the financial sector maintained its effectiveness in mobilising funds between savers and borrowers.
“Financial institutions remained well capitalised and operationally resilient, supported by ample liquidity buffers and sound asset quality. This ensured continued access to financing for households and businesses, supporting consumption, investment and livelihoods.”
Going forward, he said, in an increasingly fragmented world, ASEAN can be a source of strength.
Amid heightened global trade tensions, ASEAN’s unified commitment to a measured and constructive response reflected this. For Malaysia, being part of a region that values cooperation and stability has been an important anchor in navigating an increasingly complex global landscape.
To this end, BNM led efforts to advance deeper regional financial and economic integration under the Finance Track.
Among others, regional payment connectivity was expanded, with 29 payment linkages now operational across ASEAN member states.
“Now, a tourist making purchases or a small business selling products across borders can make and receive payments more quickly, securely and at lower cost. This reduces friction, expands opportunities and can support the livelihoods across ASEAN communities,” he cited.
He said ASEAN’s capacity to respond collectively to external shocks was strengthened, including through enhancements to the Chiang Mai Initiative Multilateralisation and critical strategies under the ASEAN Geoeconomics Task Force.
These measures reinforce ASEAN’s capacity to respond collectively to external shocks, creating an additional layer of resilience against global uncertainties
“For BNM, we will remain vigilant in ensuring that we are well-equipped to navigate the challenges ahead, without losing sight of longer-term priorities to enhance our economic prospects and preserve our resilience.”
He said the Monetary Policy Committee will continue to closely monitor developments and assess the balance of risks to the growth and inflation outlook.
“We also stand ready – as we have through successive periods of heightened uncertainty – to ensure orderly markets and manage risks of excessive volatility.”
As the Financial Sector Blueprint (FSBP) 2022–2026 enters its final phase, implementation will be accelerated along with work to develop the next course for Malaysia’s financial sector.
“We will work to better facilitate innovation, including in emerging areas such as digital finance, stablecoins and climate adaption in a safe and responsible manner,” he added.
-- BERNAMA