BNM governor says Malaysia progressing well on structural reforms, highlights need for social protection and labour market improvements
KUALA LUMPUR: Malaysia is progressing at a reasonable pace in implementing strategic structural reforms to achieve its high-income nation aspirations, according to Bank Negara Malaysia governor Datuk Seri Abdul Rasheed Ghaffour.
Beyond fiscal and investment reforms, Abdul Rasheed emphasised the need to advance social protection and labour market reforms to strengthen the country’s long-term resilience.
“Overall, we are moving at a reasonably good pace,” he stated in an interview published in The Edge.
“More importantly, there is a strong commitment to reform.”
He acknowledged that while faster progress would be ideal, a step-by-step approach considering socioeconomic realities might be necessary to avoid policy reversals.
The governor stressed that pushing reforms too aggressively might risk losing policy buy-in and acceptance.
He cited fuel subsidy reforms as an example where thorough study and data gathering were crucial for successful implementation.
Reflecting on the pandemic period, Abdul Rasheed noted that Malaysia’s social protection framework was tested, revealing gaps that require government attention.
Social protection provides economic stabilisation support and assistance to the economy, he explained.
The governor highlighted retirement benefits as particularly important as Malaysia’s population ages.
“We support these reforms and will continue to play our role in platforms like the Malaysian Social Protection Council,” he added.
Abdul Rasheed suggested exploring targeted assistance to raise incomes for low-income earners, paired with labour market reforms focusing on education and skills development.
The governor also discussed the central bank’s July decision to cut the overnight policy rate to 2.75% as a pre-emptive measure to secure growth.
In its November 6 review, Bank Negara maintained the policy rate, considering it suitable and supportive given ongoing price stability.
Regarding potential global economic slowdown impacts, Abdul Rasheed noted advanced economies remain resilient.
He emphasised Malaysia’s diversified trading partners and export base as strengths for a small open economy.
The governor highlighted Malaysia’s strong banking sector, strengthened by post-Asian Financial Crisis consolidation.
“Our banks remain resilient with healthy capital positions and sound asset quality,” he stated.
Abdul Rasheed stressed the importance of building fiscal and monetary buffers during good times.
The central bank has policy options and buffers to respond appropriately to any economic slowdown, he assured.
“Do I lose sleep over this? Admittedly, being a central banker, I think deeply about these issues,” he said.
“But I don’t worry in a way that keeps me up. I know that we have things under control.” – Bernama
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