PM confident of 6% growth, mulls ringgit trade

Source: http://www.freemalaysiatoday.com/fmt-english/politics/barisan-nasional/10119-najib-confident-of-6-growth-mulls-ringgit-trade

KUALA LUMPUR: The country is poised to grow by at least six percent this year fuelled mainly by domestic demand, Prime Minister Najib Tun Razak said.

Najib said this in an interview with CNBC Asia''s Martin Soong aired today.

He also said that the government was open to the idea of making the ringgit, which recently touched a 13-year high, tradeable offshore again.

"I think domestic demand... is high and I think (it) will continue to be relatively high this year," Najib was quoted as saying in CNBC's website.

He acknowledged that growth would taper for the rest of the year amid global uncertainties. However he was confident that the economy was on track to exceed the official six percent growth target for the year.

"Although there will be some dampening effect.. we do expect it to be fairly strong. So we should end up with at least six percent growth," he said.

The Malaysian economy expanded 10.1 percent in the first quarter — its fastest expansion in a decade — while GDP rose 8.9 percent in the second quarter.

Najib also said that he was not concerned about the ringgit's recent strength, as it reflects the fundamentals of the economy.

"The stronger ringgit doesn't seem to have a negative impact on our exports," Najib added.

"We are quite adaptive, and if we think that it''s going to help the economy, certainly we will review the situation," he said.

The strong ringgit trade against the greenback on Sept 6 was reflective of the fundamentals of the country''s economy and would not bring a negative impact on the nation's exports, he said.

"The government is monitoring the situation all the time, very closely," he said, adding that the government was comfortable with the current level.

Najib, who is also the finance minister, said that most investors felt that the issue of whether the currency was tradeable overseas was not the key determinant in their investment decisions.

"Most importantly, there is no restriction in terms of repatriation of dividends and profits, for example, and bringing in currency through the banking system. So, it is not really a major factor," he said.

The currency jumped to a 13-year high against the US dollar after Bank Negara liberalized rules on foreign exchange transactions in August.

Bank Negara held its overnight policy rate steady at 2.75 percent on Thursday. It previously raised rates three times by 25 basis points each as part of a "normalization" of rates following extraordinary measures put in place to counter the global downturn.

- Bernama/CNBC.com