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KUALA LUMPUR: In its efforts to promote a strong domestic bond market, Bank Negara Malaysia (BNM) also buys bonds on the market if necessary and under certain conditions, says Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz. (pix).
“Overall, this measure has provided an additional RM 54 billion of liquidity to the banking system,” he told Dewan Negara today.
He responded to a question from Senator Alan Ling Sie Kiong (PH-DAP), who wanted to know the fiscal and monetary policy techniques or mechanisms implemented by the Ministry of Finance to avoid excessive economic disturbance amid the Covid-19 outbreak.
Tengku Zafrul said that to curb the impact of the spread of Covid-19, the government has implemented an expansionary fiscal policy with the launch of comprehensive economic stimulus packages and recovery plans worth 295 billion ringgit or 20% of the gross domestic product (GDP), with direct fiscal injection of RM45 billion or 3% of GDP.
The economic stimulus package Prihatin Rakyat (Prihatin) and the national economic recovery plan (Penjana) also aim to improve the capacities of health services to handle Covid-19, as well as alleviate the burden of the rakyat, help companies. and help the economy. to recover, he said.
“In terms of monetary policy, the measures implemented by BNM include reducing the legal reserve ratio (SRR) by 100 basis points from three percent to two percent in March and May 2020,” he said.
Banking institutions have also been given flexibility through the assertion of Malaysian government securities and Malaysian government investment problems as part of SRR compliance, while BNM had lowered the overnight policy rate. (OPR) by 125 basis points from three percent to 1.75% in the first seven months of 2020, it added. – Named
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