[KUALA LUMPUR] Malaysia will set up a special economic committee to ensure the country keeps its growth momentum as policy makers find ways to boost investor confidence amid a rout in financial markets.
A "sharp fall" in the prices of crude and other commodities is hurting government revenue, and Malaysia remains "at the mercy of often unpredictable" global economic factors, Prime Minister Najib Razak said Tuesday.
Foreign funds have dumped more than US$3 billion of the nation's shares this year and the ringgit is near a 17-year low as political uncertainty clouds the outlook for an economy rocked by plunging oil prices and an emerging-market selloff. The government and central bank have ruled out capital controls or a ringgit peg, and said the country remains committed to market-friendly policies.
"Our economic growth in the past years has been strong and this government is determined that this record continues to be so," Najib said. He didn't provide more details on the committee.
The Southeast Asian economy expanded the least in almost two years last quarter after a new consumption tax curbed private spending and as exports fell. The ringgit weakened beyond 4 a dollar for the first time since 1998 on Aug. 12, and was at 4.2455 as of 2:20 pm in Kuala Lumpur.
"Malaysia's financial system resilience remains intact," Najib said. "Domestic financial markets continue to function in an orderly manner, and financial intermediation activities continue to function efficiently to support the financial system and financing needs of the domestic economy." Malaysia has been struggling to boost confidence in its economy and finances since oil prices started slumping late last year. Investors have also been rattled by allegations of financial irregularities at a state investment company, and Najib is facing accusations of impropriety after it was disclosed that political donations ended up in his private accounts in 2013. The accounts have since been closed.