GROWTH-SUPPORTING POLICY: Prime Minister Datuk Seri Mohd Najib Tun Abdul Razak (left) and governor of Bank Negara Malaysia, Tan Sri Dr Zeti Akhtar Aziz study animal-shaped figurines used as currency during pre-historic times at the Sasana Kijang Bank Negara Malaysia Building in Jalan Datuk Onn, Kuala Lumpur. Malaysia’s monetary policy will remain accommodative next year to support growth, says MoF in its Economic Report 2011/2012 released in conjunction with Budget 2012, tabled by Najib. — Bernama photo
KUALA LUMPUR: Malaysia’s monetary policy will remain accommodative next year to support growth, says the Ministry of Finance (MoF).
It will be determined, taking into consideration global developments and its impact on the domestic economy and inflation prospects, it said in the Economic Report 2011/2012 released here yesterday.
The economy is projected to sustain a growth of between five and six per cent in 2012 supported by strong domestic demand and economic activities generated by the ongoing Economic Transformation Programme and the 10th Malaysia Plan.
The MoF said macroprudential measures would also be implemented to prevent any financial imbalance and preserve financial stability.
“Monetary aggregates continued to grow during the first seven months of 2011. M1 or narrow money increased 14.5 per cent, as at end-July, from 11.7 per cent last year, due to higher demands deposits.
“M3 or broad money expanded 11.6 per cent, as at end-July, from 6.8 per cent last year, on account of increased bank landing to the private sector, and higher net foreign assets,” it added.
Meanwhile, financing through the banking system and capital market is expected to increase to support economic activities, especially with several major long-term projects being implemented as the country transforms into a high-income economy by 2020.
“Loan applications, approvals and disbursements posted growth of 23.1, 20.1 and 8.2 per cent, respectively, for the period between January and July 2011, from 18.8, 19.0 and 8.2 per cent, in the corresponding period last year.
“Total loans outstanding expanded 12.9 per cent to RM949.9 billion, as at end-July, with the household sector accounting for slightly more than half of the total,” the Treasury said in the report.
With the implementation of the Capital Market Masterplan 2 and the Second Financial Sector Masterplan, the financial and capital markets are expected to see greater dynamism and innovation, especially in the internationalism of Islamic finance, venture capital and green and innovative financing, it added. The ministry said Malaysia currently had the most established syariah, regulatory and legal infrastructure, which offered a comprehensive coverage of Islamic financial services across banking, takaful, capital market and innovative products.
“Malaysia remains the leader in sukuk issuance accounting for 62.7 per cent (US$112.3 billion) of the total global sukuk outstanding, as at the end of the first half of 2011,” it said. — Bernama