KUALA LUMPUR: Bank Negara Malaysia's (BNM) inflation forecast of between 2% and 3% still remains despite the introduction of the minimum wage, said the central bank governor Tan Sri Dr Zeti Akhtar Aziz.
Source from (The Star Online): http://biz.thestar.com.my/news/story.asp?file=/2012/5/9/business/11252951&sec=business
Published: May 09, 2012
Source from (The Malay Mail): http://www.mmail.com.my/story/bnm-inflation-stay-2-3-despite-minimum-wage
Published: May 09, 2012
Source from (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/rup08a/Article/
Published: May 09, 2012
She said the minimum wage policy was positive, as it would contribute to an increase in consumption as the group it catered to had a high propensity to consume.
"We have already priced in the prospect of the minimum wage. As you know, more than 100 countries in the world have already implemented it," she told reporters on the sidelines of the Asian-Pacific Association of Banking Institutes Conference, here today.
Zeti said the central bank believed that the minimum wage represented a small part of production cost and would not contribute to higher prices particularly when the country was in a period of moderating prices.
Asked on the impact of European banks deleveraging in Asia, she said most countries in Asia would be affected but to a "limited extent" because there was ample liquidity in the region.
"Our financial sector can step in to provide the liquidity," she said.
Meanwhile, Zeti was of the view that the automotive industry in Malaysia was a highly competitive industry and operating in a market that was already very saturated.
"So it's all about becoming more competitive by improving productivity, innovation, greater efficiency, reducing cost, new model and going to international market," she said.
She said this when asked whether BNM would allow the implementation of any new guidelines in stages so as to allow a soft landing for both the players and consumers.
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