POLICIES AIMED AT SUSTAINING CONSUMPTION DEMAND & SPURRING INVESTMENT ACTIVITIES

KUALA LUMPUR, Nov 12 (Bernama) -- Government policies are aimed at
sustaining consumption demand and providing positive environment for investment
activities to take place, said Bank Negara (Malaysia's Central Bank) governor,
Dr Zeti Akhtar Aziz.

She said for a few years now Malaysia's economy has been
domestic-driven.

"(Hence), while the external sectors are affected by the global economic
slowdown, we need to ensure that growth does occur in the domestic economy and
we have every opportunity to see that happen," she told reporters after
launching the International Syariah Research Academy here Tuesday.

She said while half of the global economy was likely to go into recession
next year and the other half some albeit slower growth.

"The key is to sustain consumption demand and investment activities," she
said.

She said in such a scenario the role of the banking sector was important in
lending.

"So far we have seen our banking sector, which has been resilient, still
providing lending which is vital for the growth process," she said.

Asked if the central bank would maintain the overnight policy rate (OPR) at
3.5 percent for the rest of the year, she said it has the flexibility to
undertake policy that would support economic growth during the period.

"We have the flexibility to take any needed action," he said.

She, however, declined to say if BNM would maintain the OPR.

The central bank will hold its monetary policy committee (MPC) meeting
later this month.

Zeti said at every MPC meeting the central bank would review the OPR and
"we
take into consideration the outlook for growth and inflation."

"At this point of time inflation has already peaked and it is likely to
moderate going into next year and by middle of 2009 it is expected to be below
four percent and much lower in later part of the year," she said.
-- BERNAMA