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Forecast to be revised if economy improves

KUALA LUMPUR, 16 April 2009: Bank Negara Malaysia (BNM) will revise growth forecast for the year if the economy improves in the second half, its governor, Tan Sri Dr Zeti Akthar Aziz said today.

The central bank has projected the gross domestic product (GDP) for this year to be between -1% and 1%.

She said the improvement would depend on the global measures that have been announced and implemented bringing about stability in the second half of this year.

“We are experiencing contraction [because of] external factors. But there is still domestic demand supported by stimulus packages and the easing of monetary policy,” she told reporters after the launch of SME Credit Bureau corporate identity.

Malaysia’s two stimulus packages are worth RM67 billion.

Asked about interest rates, she said it has already been front loaded and the central bank would be monitoring the situation closely.

BNM has reduced the Overnight Policy Rate (OPR) to 2%.

She said the issue was not about the cost of financing but rather access to financing.

On the proposal to internationalise the ringgit, Zeti said it would have to be done at the most stable time and not in uncertain conditions.

“One of the pre-conditions to internationalise (the ringgit) is a robust and vibrant foreign exchange market on shore. This is yet to be achieved,” she said.

At 9am today, the local unit was higher against the greenback at 3.5845/5895 from 3.6050/6100 quoted at 5pm yesterday. — Bernama

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