SRR Adjustment Only With Fundamental Change In Financial System, Says Central Bank Governor

KUALA LUMPUR, Aug 26 (Bernama) -- The statutory reserve requirement (SRR) will see an adjustment, only if there is a fundamental change in the liquidity of Malaysia's financial system, says Bank Negara Malaysia (BNM or Malaysia's Central Bank) Governor Dr Zeti Akhtar Aziz. Speaking to reporters here, Zeti said the central bank had an extensive policy toolkit to ensure the stability of the financial system. "This is important for a country like Malaysia which is now progressing to greater maturity in its financial system," she added. The SRR is a monetary policy instrument available to BNM for the purposes of liquidity management. On another note, Zeti said Malaysia can weather the current global volatility. She said the country had demonstrated it's ability to navigate such volatility during past global financial crises, so as to not disrupt economic activities. "Throughout those periods, we had a financial sector that provided support for economic growth, and trade with other parts of the world," she added. According to Zeti, Malaysia's economy would remain on a steady growth path. "At the same time, we are seeing a risk to inflation. But in our assessment, it is likely to be temporary. "This is the period of price adjustments and could lead to temporary increases in the inflation rate. But we expect that by 2016, inflation will begin to trend towards our long-term average of three per cent," Zeti said. Meanwhile, the BNM exhibition explores the history of the Malay Archipelago through currency-related objects. It ends on Dec 26, 2014. --BERNAMA