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Zeti: GDP strong, rates appropriate [22-06-2012]  
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Malaysia's central bank governor Tan Sri Dr Zeti Akhtar Aziz said domestic growth remains strong despite global economic uncertainties and that the country's interest rates are "appropriate".

In spite of the eurozone crisis, "domestic growth is still strong while inflation is moderating", Zeti told reporters here yesterday.

"At this point in time, unless there are any other significant developments in our assessment, then they (interest rates) are at the appropriate level."

Patricia Oh, an economist at TA Securities, said the Malaysian economy is likely to be domestically-driven for the remainder of 2012, but it faced risks from the eurozone debt crisis.

"There could be some threats from the global international trade segment that could potentially bring down the overall trade surplus which has been slowing down as seen in April's exports data," Zeti was quoted as saying by Reuters.

Bank Negara Malaysia has kept rates unchanged at 3.0 per cent for six straight meetings, saying that domestic inflation is expected to moderate in 2012 although Malaysia faced risks of global supply disruptions in energy and commodity markets.

Meanwhile, in a statement yesterday, Bank Negara clarified that the sale of the local banking sector's non-performing loans (NPLs) since 2005 was less than RM3 billion, and not close to RM60 billion as reported by a newspaper recently.

Bank Negara said the news report was inaccurate and misleading.

The central bank said banking institutions can sell their NPLs as part of the bank's risk management practice.

"Disposal of NPLs provides the flexibility for banks to manage their loan portfolio effectively and efficiently to maximise recovery to protect depositors' interest," it said.

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