BUSINESS NEWS in the past few months has highlighted concerns about capital flight – how Malaysia’s foreign reserves have fallen sizeably despite a positive current account surplus brought about by the country’s export earnings.
The concerns may be genuine, but the direction of capital movement being experienced has been taken into account, as a contingency, as part of a monetary policy designed and adopted by Bank Negara Malaysia. There are a variety of policy options available to central banks across the world and choices are made to pursue the twin economic objectives of growth and stability based on circumstances specific to countries concerned.
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