Bank Negara Malaysia (the Central Bank of Malaysia), is a statutory body which started operations on 26 January 1959. Bank Negara Malaysia is governed by the Central Bank of Malaysia Act 2009. The role of Bank Negara Malaysia is to promote monetary and financial stability. This is aimed at providing a conducive environment for the sustainable growth of the Malaysian economy.
Bank Negara Malaysia’s monetary policy stance is to maintain price stability while remaining supportive of growth. Bank Negara Malaysia is also responsible for financial system stability. This is achieved by developing a sound, resilient,
progressive and diversified financial sector which serves to support the sectors of the real economy. It also plays an important function in implementing initiatives to deepen and strengthen the financial markets, including the foreign exchange market.
Bank Negara Malaysia has played a significant developmental role in developing the financial system infrastructure in advancing the financial inclusion agenda. This is to ensure all economic sectors and segments of the society have access to financial services. In addition, Bank Negara Malaysia also oversees the nation’s payment systems infrastructure which emphasize on the efficiency and security of the financial systems.
As the banker and adviser to the Government, Bank Negara Malaysia provides advice on macroeconomic policies and the management of public debt. Bank Negara Malaysia is also the sole authority in issuing the national currency and in managing the country's international reserves.
OBJECTIVE OF BANK NEGARA:
To issue currency and keep reserves safeguarding the value of the currency; To act as a banker and financial adviser to the Government;
To promote monetary stability and a sound financial structure; To promote the reliable, efficient and smooth operation of
national payment and settlement systems and to ensure that the national payment and settlement systems policy is directed to the advantage of Malaysia; and
without regard to profit as a primary consideration.
Hence, the functions of the Bank are carried out within the context of the broader goals of promoting economic growth, a high level of employment, maintaining price stability and a reasonable balance in the country's international payments position, eradicating poverty and restructuring society. In particular, the Bank ensures that the availability and cost of money and credit in the economy are consonant with national
Macroeconomic objectives:
In this respect, the Bank acts as the banker for currency issue, keeper of Bank Negara Malaysia (the Central Bank of Malaysia), is a statutory body which started operations on 26 January 1959. Bank Negara Malaysia is governed by the Central Bank of Malaysia Act 2009. The role of Bank Negara Malaysia is to promote
monetary and financial stability. This is aimed at providing a conducive environment for the sustainable growth of the Malaysian economy.
Bank Negara Malaysia’s monetary policy stance is to maintain price stability while remaining supportive of growth. Bank Negara Malaysia is also responsible for financial system stability. This is achieved by developing a sound, resilient,
progressive and diversified financial sector which serves to support the sectors of the real economy. It also plays an important function in implementing initiatives to deepen and strengthen the financial markets, including the foreign exchange market.
Bank Negara Malaysia has played a significant developmental role in developing the financial system infrastructure in advancing the financial inclusion agenda. This is to ensure all economic sectors and segments of the society have access to financial services. In addition, Bank Negara Malaysia also oversees the nation’s payment systems infrastructure which emphasize on the efficiency and security of the financial systems.
As the banker and adviser to the Government, Bank Negara Malaysia provides advice on macroeconomic policies and the management of public debt. Bank Negara Malaysia is also the sole authority in issuing the national currency and in managing the country's international reserves. international reserves and
safeguarding
the value of the ringgit, banker and financial adviser to the
Mission Statement:
Bank Negara Malaysia, as the Central Bank, is committed to excellence in promoting monetary and financial system stability and fostering a sound and progressive financial sector, to achieve sustained economic growth for the benefit of the nation. promoting a work culture which emphasises the highest standards of
professionalism and integrity, prudence, teamwork and innovation,developing and maintaining a committed workforce which is highly competent and proactive,
sensitive to the changing needs of the industry,adopting a collaborative approach in everything we do promoting the effective use of technology and good work
practices to enhance productivity, efficiency and quality,adopting policies and practices to enhance the competitivenessof local financial institutions to face
international competition and having the necessary financial resources and financial instruments to effectively manage monetary stability.
Role and Function of Bank Negara Malaysia:
Bank for Currency Issue
BNM commenced to issue its own currency on June 12, 1967, thereby replacing the Currency Board as the sole currency issuing authority in Malaysia. Under The Malaysian Currency (Ringgit) Act 1978, the Malaysian dollar and cent were renamed “Ringgit” and “sen” respectively.
(i) arrange for the printing of currency notes and the minting of coins. (ii) issue, re-issue and exchange notes and coins at its office and at such
agencies as it may, from time to time and establish or appoint
(iii) arrange for the safe custody of unissued stocks of currency and for the preparation,safe
custody and destruction of plates paper for the printing of notes and of dies for the minting of coins.
Keeper of International Reserves
The country’s official external reserves are held and maintained by BNM. Such holdings are generally held in the form of gold, reserves position in the International Monetary Fund (IMF), Special Drawing Rights (SDR) and a well managed and diversified portfolio of foreign exchange assets and
investments denominated in the major international currencies, such as bank balances, Treasury Bills, Bonds and other appropriate term securities to secure the best result and returns/benefits for the country. Throughout the years, gold and foreign exchange have been the major components of external reserves held by BNM.
BNM acts as a banker to the government, state governments and statutory bodies.
(i) Management of Government Accounts It provides cheque facilities, accepts funds and makes payments on behalf of the government and undertakes the foreign exchange business of the government.
(ii) Source of Funds to Government Bank Negara Malaysia Ordinance 1958 empowers the BNM to provide temporary advances to the Government to cover any deficit in the budget revenue,However, there are legal limitations to the amount and the duration of loans that BNM can make available to the government.
Among the major role of the Bank is the prudent conduct of monetary policy, which has seen generally low and stable inflation for decades and thereby, preserving the purchasing power of the ringgit. The Bank is also responsible for bringing about financial system stability and fostering a sound and progressive financial sector. There is now in place a well diversified, comprehensive and resilient financial sector, that is able to meet the increasingly sophisticated needs of consumers and businesses, and which has become a growth driver in the economy.
The Bank also plays a significant developmental role, including development of financial system infrastructure with major emphasis placed on building the nation's efficient and secured payment systems as well as the necessary institutions (including Securities Commission, KLSE, now known as Bursa Malaysia and Credit Guarantee Corporation) which are important towards building a comprehensive, robust and resilient financial system.
The Bank actively promotes financial inclusion, which has led to improved access to financial services for all economic sectors and segments of society, thereby supporting balanced economic growth.
