MALAYSIA NOT FACING ECONOMIC CRISIS?

KUALA LUMPUR, Malaysia - Malaysia is not facing an economic crisis, said Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz(photo), despite widespread concerns over the state of the country's economy.

In an exclusive interview with The New Straits Times published today, Zeti insisted it was not all "doom and gloom" but they were not portraying that everything was fine either.

"Our country is not heading towards a crisis," she told the English daily and cited the country's strong fundamentals, including a surplus in its current account, low unemployment rate, high level of savings and low foreign debts.

• "No, it isn’t doom and gloom, but we are not portraying a picture that everything is fine. We are picturing a very challenging period that we have been able to manage so far."
• She said the situation would be much worse if steps had not been taken to strengthen the banking sector, to develop financial markets and diversify the economy.
• "We have not seen a widespread closure of businesses. Businesses may be scaling back, this is the reality of the environment. We should accept these realities and not be in the phase of denial.
• “But to say that we don’t have strong fundamentals is also not correct. We have strong fundamentals, and these are the fundamentals that will allow us to ride out this rough period and bounce back to a better economic performance,” she was quoted as saying.

Despite assurances from Putrajaya that Malaysia's fundamentals are strong, concerns have been mounting over the economy as the ringgit, Asia's worst performing currency in the past one year, slid beyond the RM4 mark against the US dollar.

She told the NST that about US$28 billion (RM118 billion) had fled Malaysian shores since September last year.
However, prior to that, US$60 billion in foreign funds flowed in between 2009 and last year.

Source:  New Straits Times