Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah is seen with Zeti and other Asean finance ministers and central bank governors during the last day of the AFMGM at Kuala Lumpur Convention Centre. — Bernama photo
KUALA LUMPUR: Bank Negara Malaysia (BNM) said it will review the global economic conditions but stressed that the country’s interest rates remain accomodative and supportive of the economy.
Its Governor Tan Sri Dr Zeti Akhtar Aziz said the central bank is steadier in its approach to interest rate adjustments as it relies on pro-growth measures in its monetary policy making.
“Of course we have to take into account of what is developing. We cannot live in our own world because all of us are affected by global developments,” she said.
Zeti was speaking to reporters at the inaugural Asean Finance Ministers’ and Central Bank Governors’ Meeting (AFMGM) here which ended on Saturday.
Most of the Asian Central Banks have cut their interest rates this year to bolster their economic growth.
“Right now, our interest rates are accomodative, and very supportive of the economy. We will review conditions but right now our economy is on a steady growth path and the interest rates support that growth trajectory,” said Zeti.
Zeti stressed that the Asean region would not pursue a single currency as the region is very diverse and does not have the pre-conditions for it.
“We are going for financial integration to achieve the same objectives of greater collective growth,” she added.
On Friday, former Indonesian Finance Minister Dr Mohamad Chatib Basri said the implementation of a single currency would not be easy, in light of the diverse economic structure and development levels of the 10 Asean member states.
“A single currency is probably the issue we really have to think carefully over. You can still have the integration and your own currencies,” he said.
Meanwhile, BNM also said Asean has a very rigorous surveillance mechanism to withstand any volatility in the foreign exchange (forex) market.
“At this point of time, Asean’s financial system and the emerging world generally have been receiving volatile capital flows.
“While the form of collaboration in managing the flows has been in terms of surveillance to know exactly where the flows come from and outflows, surveillance is very rigorous and many of us have real-time information and we share this among each other,” Zeti told a press conference.
Zeti was responding to a question on how Asean countries would coordinate to handle the current volatility in the foreign exchange market.
She said: “So far, most of us have been able to intermediate these flows.
Our collaboration has been in the form of sharing of information arising from our surveillance.”
In a joint statement issued after the meeting, AFMGM welcomed the work of the Asean Integration Monitoring Office (AIMO) in ensuring that the measures under the Asean Economic Community Blueprint are implemented accordingly, with the development of surveillance reports, monitoring tools and capacity building programmes.
AFMGM has agreed to enhance the capacity and resources of AIMO and encouraged member states and external partners to continue to support AIMO in implementing its work and fulfilling its mandate.
“We acknowledged ASEAN+3 Macroeconomic Research Office’s (AMRO) parallel but important role in assessing the macroeconomic and financial developments in the region.
“We noted the progress of elevating the status of the AMRO into an international organisation following the signing of the AMRO Agreement on Oct 10, 2014.
“In this regard, we pledged to work with our Plus Three partners (Japan, China and Korea) to support the AMRO and to ensure macroeconomic and financial stability in the region,” AFMGM added.
Established in Singapore in April 2011, AMRO is an independent regional surveillance unit to monitor and analyse regional economies and support Chiang Mai Initiative Multilateralisation decision-making. — Bernama