She said foreign direct investment inflows have continued for more than 100 years as the country represents a profit centre for investors.

Zeti said surpluses in trade and investment have supported the country’s currency and, in addition, Malaysia also has very healthy reserve levels.

“We have a very solid financial system, especially a banking sector that intermediates all these financial flows, and just like Thailand, we have a very large bond market.

“So all these factors intermediate these flows,” she told reporters after the announcement of a local currency settlement framework by BNM and the Bank of Thailand here today.

“Malaysia is an oil exporting country, and when oil prices and commodity prices collapsed, they thought our economy would also collapse.

“But they didn’t realise that we have restructured our economy,” added Zeti.

She pointed out that the Malaysian economy is no longer about oil and gas as about 80% of the economy is contributed by the services and manufacturing sectors.

“The country has diversified and has not been devastated by the oil price drop, and as a result we are able to manage this growth of between 4-5%.

“In 2015, we had growth of 5%. Now there’s lack of recognition, so we need to speak up more, to say that we have diversified ourselves and we are not that vulnerable.”

On monetary policy, Zeti said there should not be an over-reliance on monetary policy to bring about stability in the economy, as interest rates have trended to near zero.

“There should be greater coordination within individual countries to look at other policies like fiscal and structural policy, and it is important that central banks take into account domestic considerations in setting the monetary policy agenda,” added Zeti.

– BERNAMA