Malaysia rules out new steps

Malaysia rules out new steps

KUALA LUMPUR (AFP): Malaysian Finance Minister Anwar Ibrahim yesterday ruled out additional steps to boost the beleaguered economy but said measures in the 1998 federal budget may be finetuned.

"(There will be) no other major measures other than what was announced in the budget but minor adjustments can be made and we should be given the flexibility from time to time," Anwar told reporters.

Analysts had said the 1998 budget announced last Friday had not met expectations and failed to address the country's swollen current account deficit problem.

The disappointing budget and mounting regional concerns sent the Malaysian stock market and ringgit plunging since Monday.

But Anwar, who is also deputy premier, expressed confidence that regional bourses, hit by a new wave of panic selling Thursday, would be able to "withstand the onslaught."

"We are monitoring (but) we believe in fundamentals. We will be roaring to move forward," he added.

Asked if he would rule out a rise in interest rates in the medium term to help stabilize the ringgit, Anwar said: "I will give you an answer in three months time."

But he hinted there would be no such move, adding, "we have to maintain a balance to generate growth, confidence and to allow the private sector to generate activity. That is the policy."

Anwar urged local banks to "maintain (their) level of prudence in their management of their resources and portfolios," referring to their forced selling activities which have further dragged down share prices.

"I always believe in market forces and the invisible hand ... there's always a need to balance the two," he said.

Anwar said the government was in contact with the International Monetary Fund (IMF) "mainly over the issue of rules and regulations about currency trading."

Asked if Malaysia would seek IMF help to overcome its financial turmoil, he said: "We have not discussed the need for IMF right now or in the foreseeable future."

"I am optimistic the ringgit will strengthen to its previous levels," he added.