Bank Negara Malaysia governor calls for strengthened fundamentals and policy buffers to navigate global uncertainty and ensure inclusive, long-term prosperity.
KUALA LUMPUR: Bank Negara Malaysia Governor Datuk Seri Abdul Rasheed Ghaffour has emphasised the critical need to strengthen economic fundamentals and policy buffers to ensure continuous growth amid global trade uncertainties.
He said this approach is crucial to guarantee the well-being of the rakyat.
Abdul Rasheed stated that by improving fiscal sustainability and attracting quality investments, there is space to advance urgent reforms for social protection and the labour market.
“These reforms may involve some short-term adjustments, but they are necessary to ensure that growth is more inclusive and benefits the rakyat – including generations to come,” he said in the BNM Annual Report.
The central bank predicts Malaysia’s Gross Domestic Product will grow between 4% and 5% in 2026.
It noted that Malaysia’s domestic resilience and diversified export structure provide a solid foundation to navigate current external headwinds.
Abdul Rasheed stressed that Malaysia’s path to becoming a developed, high-income nation must be paved with shared prosperity.
“We must build an economy that creates better paying jobs, supports our households and businesses, and remains resilient for decades to come,” said the governor.
He affirmed that the financial sector maintained its effectiveness in mobilising funds between savers and borrowers.
Financial institutions remained well capitalised and operationally resilient, supported by ample liquidity buffers and sound asset quality.
This ensured continued access to financing for households and businesses, supporting consumption, investment and livelihoods.
Looking ahead, Abdul Rasheed said ASEAN can be a source of strength in an increasingly fragmented world.
He highlighted that ASEAN’s unified commitment to a measured and constructive response amid heightened global trade tensions reflects this.
For Malaysia, being part of a region that values cooperation and stability has been an important anchor in navigating an increasingly complex global landscape.
BNM has led efforts to advance deeper regional financial and economic integration under the Finance Track.
Regional payment connectivity was expanded, with 29 payment linkages now operational across ASEAN member states.
“Now, a tourist making purchases or a small business selling products across borders can make and receive payments more quickly, securely and at lower cost,” he cited.
He added that this reduces friction, expands opportunities and can support livelihoods across ASEAN communities.
ASEAN’s capacity to respond collectively to external shocks was strengthened through enhancements to the Chiang Mai Initiative Multilateralisation.
Critical strategies under the ASEAN Geoeconomics Task Force also contributed to this resilience.
These measures reinforce ASEAN’s capacity to respond collectively to external shocks, creating an additional layer of resilience against global uncertainties.
“For BNM, we will remain vigilant in ensuring that we are well-equipped to navigate the challenges ahead, without losing sight of longer-term priorities to enhance our economic prospects and preserve our resilience,” he said.
The Monetary Policy Committee will continue to closely monitor developments and assess the balance of risks to the growth and inflation outlook.
“We also stand ready – as we have through successive periods of heightened uncertainty – to ensure orderly markets and manage risks of excessive volatility.”
As the Financial Sector Blueprint 2022–2026 enters its final phase, its implementation will be accelerated alongside work to develop the next course for Malaysia’s financial sector.
“We will work to better facilitate innovation, including in emerging areas such as digital finance, stablecoins and climate adaption in a safe and responsible manner,” he added.
