M'sia to reap benefits of China's reforms, says BNM Governor

Kuala Lumpur: Malaysia is set to reap the benefits of the economic reforms in China, despite the transformation process causing a rise in the republic's bad debt, said Bank Negara Malaysia Governor Datuk Muhammad Ibrahim.He said that the current transformation in China is similar to what Malaysia had undergone previously.

"They are transforming their financial system, looking at reforms for the banks and state-owned enterprises, changing their export-based model to a more domestic-based model, and all these will have issues with debt.

"But if all these are (successfully) completed, and China is on a stronger footing, we will certainly benefit from it.

This is simply because China is one of our biggest trading partners.

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Sabah revenue hits RM6.97 billion: Hajiji says GRS State Government may see full term

Kota Kinabalu: The Sabah Government continued its momentum in managing the economy in line with the commitment and spirit of the Sabah Maju Jaya (SMJ) when it posted record high state revenue of RM6.973 billion last year.

"So, that will be very positive for us," the newly-appointed governor told a press conference here Friday after announcing the country's first quarter economic performance.

He was responding to a question on the depth of Bank Negara's concern over the bad debt problem in China and its impact on this region given the close linkages between the two nations.

It was reported that non-performing loans at China's commercial banks soared 41.7 per cent to 1.39 trillion yuan (US$213 billion) as of end-March compared to the same period a year ago.

The ratio of bad debt to China's overall lending also expanded 0.36 percentage point to 1.75 per cent.

Meanwhile, on the ringgit, Muhammad said although the local currency will see a lot of noise on a daily basis, including a possible increase in the US Federal Reserve's interest rates, it would stabilise in the long run to reflect the economic fundamentals.

"There won't be any change in the intervention policy of Bank Negara. We will only ensure that there's smooth performance of the ringgit either going up or going down.

"I think it's very important to ensure that the market is not unduly worried about the movement.

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We need to ensure the stability and smoothness of the movement," he added.

On the influence of 1Malaysia Development Bhd-related issues on the ringgit, he said this factor has been priced in. – Bernama

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