Malaysia 'can absorb global volatility'
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The recent third round of quantitative easing (QE3) by the US Federal Reserve will not have much impact on Malaysia as the country's financial system is strong and capable of absorbing any financial volatilities arising from this move, said Zeti Akhtar Az
Aziz said though the quantitative easing exercise had implications on the volume of liquidity in the international financial system, the domestic financial system was now more developed with strong intermediaries capable of absorbing any volatilities from this exercise.
“We have surges of inflows but also have reversals and previously would have been destabilised if it was more than 10 years ago. But in the current environment, we have advanced significantly to enable us to intermediate these volatile financial flows,” she said on the sidelines of the third Global Islamic Finance Forum (GIFF) 2012 in Kuala Lumpur.
Zeti said the previous measures to strengthen the financial system over a 10-year period was sufficient to manage any volatility of financial flows.
“These measures are sufficient now to deal with this kind of volatility, and most of all, as we have also liberalised, we are seeing inflows and outflows, and inflows by our own corporate sector and funds, including pension funds.”
