There is sufficient liquidity in the financial system and it has no plans to inject more funds, said Bank Negara Malaysia, local media reported on Tuesday.
"We have sufficient liquidity in our financial system so it has not been necessary to inject liquidity," Malaysian central bank Governor Zeti Akhtar Aziz told reporters after opening the Second Malaysian Islamic Finance -- Issuers and Investors Forum 2007 in Kuala Lumpur on Monday.
She made the point about the Malaysian banking system even as central banks around the world pumped billions of dollars more into their systems last week to support economies amid a swirling U.S. credit crisis.
Late last week that more than 300 billion U.S. dollars has been pumped in by central banks in Europe, Asia and North America to keep money flowing through the global financial system on fears that the subprime mortgage crisis in the United States could spread worldwide.
Asked if there will be a need for a similar action, Zeti said Bank Negara is monitoring the situation.
"There is high level of liquidity in our financial system and in fact in the last several weeks we have been absorbing liquidity, " the New Straits Times quoted Zeti as saying.
On whether the subprime crisis will result in liquidity tightening in the market, Zeti said the impact from this crisis has yet to be seen in the region.
She said the region was "still very stable" with the uncertainty and volatility being so far confined to the Western financial systems.
"Although we expect increased volatility, the economies in our region are well positioned to absorb and deal with increased volatility," said Zeti.
She pointed out that the Malaysian financial system is increasingly becoming more diversified, giving it the strength to absorb shocks.
Source: Xinhua
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