20100303 0946 Malaysian Economic News.

Bank Negara Malaysia (BNM) will raise interest rates in a measured, gradual way in order to keep supporting the economy, governor Tan Sri Dr Zeti Akhtar Aziz said. She added that inflation pressures remained modest although with possible increase and the central bank would not rush to withdraw policy support. Interest rate will continue to be supportive of growth. Zeti also said a change to banks’ reserve requirements was not likely to be part of the normalisation process unless they have a fundamental situation of extreme excess liquidity in the system. Returning to a system of fixed exchange rates would not be warranted as they want more stability, she added. (Financial Daily)
We expect Bank Negara Malaysia to raise the overnight policy rate by 50bps to 2.50% by end-2010. The first rate hike of 25bps could come on 4 March.

Malaysia is confident of raking in higher foreign direct investments (FDIs) this year. It’s targeted at RM27.0bn for 2010, International Trade and Industry Minister Mustapa Mohamed said. “We hope to see an increase both from foreign and domestic for this year,” he said. The efforts would continue to be made to woo more foreign companies in Malaysia to increase their investments while continue to encourage more local investors to increase their investments, he added. (Bernama, BT)

Malaysia's exports are expected to grow between 6 .0-7.0% in 2010, double the earlier forecast of a 3.5%, as demand improves in tandem with the global economic recovery. This is close to the historical figure of 7.0-9.0% achieved in a good year, said Minister of International Trade and Industry Datuk Seri Mustapa Mohamed. He added that a higher export growth is needed for the country to achieve the gross domestic product (GDP) growth forecast of 5.0-6.0% for this year. (Bernama, BT)
We are looking for a stronger export growth estimate of 10.0% this year, underpinned by the upturn in global chips demand as well as the still-firm commodity prices.

The government will emphasise on promoting more domestic private investments through public-private partnership (PPPs) under the 10th Malaysia Plan instead of depending on foreign direct investments to ensure future growth, said Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop. He added that the country's healthy current account surplus would ensure there are enough resources to finance a much higher level of private investments. (Bernama)

The government will continue with its moves to further build and develop more infrastructures in the country via privatisation initiatives, said Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop. “Infrastructure development is a key component to unlock potential activities and support sustainable economic growth. The government will continue to place emphasis on it as part of our economic transformation,” he said. (Financial Daily)

The issue over the use of food grade insulated fish box is now settled, with fish importers agreeing to abide by the ruling, Agriculture and Agro-based Industry Minister Datuk Seri Noh Omar said. Fish importers ended their boycott yesterday following an agreement with the authorities to extend the deadline until November to switch to food-grade insulated fish boxes.

• He also said the importers had mistakenly though they had to use the insulated fish boxes immediately and now the association members were satisfied with Noh's explanation including on the monopoly in the supply. They were now allowed to buy boxes from manufacturers which offered lower prices, he said. He also admitted that the ministry had overlooked the need to allow the production of 30kg boxes with a subsidy of RM30 per unit. Noh had previously announced a subsidy of RM50 for the 100kg boxes and RM30 for the 50kg boxes, with a total subsidy of RM2.4m. (NST, Bernama)