Reserve Requirements
Malaysia: Reserve Requirements, AFC
Purpose
During monetary tightening, to “enhance the efficiency of the intermediation process and not to provide additional liquidity to the system” (BNM 1998a); during monetary easing, to “ease liquidity in the banking system” (BNM 1998h)
Key Terms
- Range of RR Ratio (RRR) Peak-to-Trough13.5%–4% of eligible liabilities
- RRR Increase PeriodPre-crisis (set at 13.5% on June 1, 1996)
- RRR Decrease PeriodFebruary 1998 – September 1998
- Legal AuthorityCentral Bank of Malaysia Act 1958 (Revised—1994) and Banking and Financial Institutions Act 1989
- Interest/Remuneration on ReservesUnremunerated
- Notable FeaturesBNM first cut the SRR during monetary tightening but cut the SRR further as it switched to monetary easing; Malaysia concurrently replaced a longstanding liquid asset requirement with a liquidity management framework
- OutcomesMYR 22 billion (USD 5.8 billion) injected into the banking system with the initial cuts, offset by decreased direct lending to the interbank market; MYR 15 billion injected with the later cuts
Bank Negara Malaysia (BNM) unpegged the ringgit in July 1997, days after Thailand floated the baht. Ringgit depreciation and adverse investor sentiment worsened, contributing to a domestic liquidity shortage and capital flight. Malaysia experienced market instability in the early months of 1998, particularly pressure on its exchange rate, foreign currency reserves, and interest rates. At the same time, disruptions in the domestic money market and loan intermediation process caused an increase in lending rates, which resulted in debt servicing problems and weakened financial stability. To facilitate lending and productive economic activity, BNM twice lowered the statutory reserve requirement (SRR) at commercial banks, merchant banks, and finance companies on February 16 and July 1, 1998. BNM simultaneously offset the additional liquidity added to the banking system by reducing direct central bank lending to the interbank market and raised the three-month intervention rate (three-month interbank rate) to better reflect liquidity conditions in the market. When inflationary pressure subsided toward the end of summer 1998, BNM began to pursue monetary easing. Thus, the central bank did not sterilize the SRR reductions on September 1 and 16, 1998. BNM paired these latter, unsterilized SRR reductions with a lower three-month interbank rate to promote liquidity and enhance banking institutions’ lending capacity. The initial SRR reductions would have released MYR 22 billion (USD 5.8 billion) into the banking system, had BNM not lowered direct lending to the interbank market. The latter SRR reductions released MYR 15 billion into the banking system.
In the early 1990s, the Malaysian economy enjoyed relatively strong fundamentals: The real GDP growth rate averaged 8.5% per year, unemployment fell below 3%, exchange rates were stable, and foreign liabilities did not exceed Malaysia’s substantial buildup of international reserves (BNM 1998k; BNM 1999; Kaplan and Rodrik 2001; Meesook et al. 2001; Sundaram 2006). However, the floating of the Thai baht on July 2, 1997, triggered the Asian Financial Crisis (AFC), exposing vulnerabilities in the Malaysian economy (BNM 1998k; Feldstein 1998; Meesook et al. 2001; Poon 1999). In the years preceding the AFC, Malaysian authorities’ investment-led growth strategy depended on readily reversible portfolio investments of uncertain quality (Kaplan and Rodrik 2001; Meesook et al. 2001; Poon 1999; Sundaram 2006). After defending the ringgit’s value,FNThese operations included intervention in the exchange market and an elevated interbank rate. BNM briefly raised the interbank rate to 35%, then lowered it to 10% (Meesook et al. 2001). Bank Negara Malaysia relented and unpegged the ringgit on July 14, 1997 (Meesook et al. 2001; Poon 1999). Malaysia felt the acute effects of the crisis later than other countries in the region. Conditions continued to worsen even after pressure eased in Thailand and the Republic of Korea (Korea) by the beginning of 1998 (see Figure 1) (BNM 1999; Kaplan and Rodrik 2001). Adverse investor sentiment and ringgit depreciation contributed to a domestic liquidity shortage and capital outflows estimated at more thanUSD 10 billion from early 1997 to mid-1998 (Meesook et al. 2001).
Unlike Thailand, Indonesia, and Korea, Malaysia did not seek a bailout from the International Monetary Fund (IMF) (AP-Dow Jones News Service 1997; Poon 1999; Sundaram 2006). Prime Minister Mahathir Mohamad cited economic and political reasons in an address on December 31, 1997: “[The IMF] will force us to increase taxes, raise our interest rates, close a large number of our banks and finance companies and let companies which are weak because of the decline in the value of the ringgit go bankrupt” (AP-Dow Jones News Service 1997). In its 1998 Annual Report, BNM argued that “the orthodox International Monetary Fund (IMF) policy prescription of tight fiscal and monetary policies would only have destabilized the situation further and induced a much sharper contraction in real output” (BNM 1999, 10). According to BNM, international investors perceived it as a sign of weakness that Malaysia did not participate in an IMF program, because “international investors did not differentiate the risks in countries in the Asian region” (BNM 1999, 14). In fact, BNM said, Malaysia would not have qualified for an IMF program, because of its strong balance of payments and relatively limited foreign debt (BNM 1999).
Figure 1: Financial Pressure Market Index (Jan. 1996=1)

Source: Kaplan and Rodrik 2001.
In retrospect, Malaysia’s response to the AFC fell into four phases. First, Prime Minister Mahathir led a series of defensive policies from July to December 1997 (Sundaram 2006). In this initial phase, BNM cut interest rates and the government tried to raise a loan in international capital markets, but failed after a credit downgrade (Poon 1999). Second, from December 1997 to summer 1998, Deputy Prime Minister and Finance Minister Anwar Ibrahim tightened fiscal and monetary policy to contain inflationary pressure, while taking steps to promote financial stability (Kaplan and Rodrik 2001; Sundaram 2006). Measures during this period included cuts to government spending by 18%, intervention in the foreign exchange interbank market, full deposit guarantees of all financial institutions, and more restrictions on stockbroking companies (Meesook et al. 2001; Sundaram 2006). Third, Anwar led a reflationary period from summer 1998 until his dismissal from the cabinet and later arrest in September, 1998. This included an attempt to temper the downturn through spending policies. Fourth, Mahathir introduced exchange and capital controls to insulate monetary policy and other domestic government interventions from volatile foreign markets (Meesook et al. 2001; Sundaram 2006). This included repegging the ringgit at MYR 3.80 per US dollar,FNThe exchange rate hovered around USD 1.00 = MYR 2.50 in the years leading up to the crisis (Sundaram 2006). restricting the repatriation of portfolio capital, and prohibiting offshore ringgit activities (BNM 1999; Kaplan and Rodrik 2001; Meesook et al. 2001; Sundaram 2006).
The focus of this case study—lowering the statutory reserve requirement (SRR)—began during the monetary tightening phase and continued into the monetary easing phase (Sundaram 2006). During this second period of tightened fiscal and monetary policy, illiquidity in domestic financial markets disrupted corporate borrowers’ access to credit. BNM lowered the SRR to encourage commercial banks, merchant banks, and finance companies to finance productive economic activity (BNM 1998a; BNM 1999). For the initial SRR cuts on February 16 and July 1, 1998, BNM announced that it would reduce direct lending on the interbank market to sterilize any liquidity impacts of the SRR easing and contain base money growth (BNM 1998a; BNM 1998e). BNM also raised the three-month intervention rate (henceforth, three-month interbank rate) to maintain tight monetary policy (BNM 1998a). However, by August, BNM had shifted to an expansionary monetary policy stance, so it did not sterilize the later SRR cuts on September 1 and 16, 1998 (BNM 1998h; BNM 1998j). BNM also lowered the three-month interbank rate (BNM 1998h). At the same time, BNM changed its method for calculating required reserves. It widened the band for permissable daily variation in the average balances required to meet the SRR, giving banking institutions more flexibility in managing their liquidity (BNM 1998d).
Banks’ deposits with BNM declined by MYR 88.5 billion (USD 23 billion)FNUSD 1 = MYR 3.80 on December 31, 1998, according to the IMF. in 1998, according to its 1998 Annual Report (BNM 1999). Required statutory reserves declined by MYR 42 billion (BNM n.d.b).
BNM lowered the SRR to facilitate the intermediation process and stoke productive economic activity. Overall, total loans issued by the banking system declined in 1998 by MYR 7.6 billion or 1.8% due to economic contraction, high interest rates, higher repayments in response to higher interest rates, and the stalling of expansion plans. This downward trend occurred from February to September 1998.FNBNM noted decreased lending “for consumption credit, purchase of securities, purchase of transport vehicles and community, social and personal services and manufacturing sectors” during this time (BNM 1999). However, the central bank saw an “encouraging” turnaround in October and November 1998, as issued loans began to increase. The central bank noted in its 1998 Annual Report that loan approvals amounted to MYR 24 billion in the first half of the year and MYR 38.2 billion in the second half of the year (BNM 1999).
BNM attributed the turnaround in banking activity in 1998 to its policy measures. It provided data describing the impact of its reductions to the SRR in the two phases in 1998 (BNM 1999).
First, the central bank estimated that the initial SRR cuts on February 16 and July 1, 1998, would have released MYR 22 billion into the banking system, if it were not for the sterilizing effect of its reduced direct lending on the interbank market (BNM 1998a; BNM 1998e). BNM also attributed declining money market rates and a subsequent reduction in lending rates during this period to its SRR cuts. Just in the month of February 1998, lending rates fell by 5.2%, from 21.5% to 16.3% (BNM 1999).
Later, BNM estimated that the SRR reductions on September 1 and 16, 1998, released MYR 15 billion into the banking system (BNM n.d.b). The central bank also said that monetary easing during this phase—including unsterilized reductions to the SRR and reductions to the three-month interbank rate—led to declines in the average base lending rates (BLRs) of commercial banks and finance companies. The average BLR of commercial banks fell from 11.7% in August to 8.0% in November 1998. The average BLR of finance companies fell from 14.2% in August to 9.5% in November 1998 (BNM 1999).
Key Design Decisions
Purpose1
By early 1998, illiquidity in domestic financial markets disrupted corporate borrowers’ access to credit. Lending rates rose above the official target interbank rate, creating debt servicing problems in the corporate sector. In response, BNM lowered the SRR for commercial banks, merchant banks, and finance companies (BNM 1998a; BNM 1999). The central bank said in press releases that it would sterilize the SRR cuts on February 16 and July 1, 1998, to maintain its tight monetary policy (BNM 1998a; BNM 1998e). The central bank said in press releases that it would sterilize the SRR cuts on February 16 and July 1, 1998, to maintain its tight monetary policy (BNM 1998a; BNM 1998e).
As inflationary pressure subsided, BNM began monetary easing in August 1998 (BNM 1998h). Thus, BNM did not sterilize the SRR cuts on September 1 and 16, 1998 (BNM 1998h; BNM 1998j). These SRR reductions along with the reduced interbank rate would ease liquidity in the banking system so that borrowers could more readily obtain loans at a lower rate (BNM 1998h; BNM 1998j; BNM 1999).
Part of a Package1
BNM sought to stem inflation from the ringgit’s depreciation during the first half of 1998 (BNM 1998a; BNM 1999). To sterilize the additional liquidity that would have been released by the SRR reductions, BNM reduced direct lending on the interbank market in conjunction with its SRR reductions on February 16, 1998, and July 1, 1998 (BNM 1998a; BNM 1998b; BNM 1998e; BNM 1998f). BNM estimated that the February 16 and July 1 reductions would have released MYR 14 billion and MYR 8 billion of additional funds, respectively, if the central bank had not reduced direct lending (BNM 1998a; BNM 1998e).
To maintain tight monetary policy, BNM raised the three-month interbank rate from 10% to 11% with the first SRR reduction on February 16, 1998 (BNM 1998a).
BNM began “cautious” monetary easing in August 1998 and lowered the three-month interbank rate to 9.5% with the SRR reduction on September 1, 1998 (BNM 1998g).
Earlier in March 1998, BNM said that it would review the role of the the SRR and liquid asset requirement (LAR) to “fully [restore] investor confidence and [create] an environment that would support the return of the economy to a stronger growth path” (BNM 1998c). The LAR required that commercial banks hold at least 17% of their eligible liabilities in liquid assets; the requirement was 10% for finance companies and merchant banks (or 12.5% if they granted negotiable instruments of deposit) (BNM 1998g).
On July 31, 1998, BNM announced a new liquidity framework that phased out the LAR. Instead, the BNM required banking institutions to forecast their assets, liabilities, and off-balance-sheet commitments to meet near-term obligations in addition to “unexpected heavy withdrawal for at least one month” (BNM 1998g). In practice, commercial banks had to be able to withstand the withdrawal of 5% of their deposit base over a week or 7% over a month; merchant banks and finance companies had to be able to withstand the withdrawal of 5% of their deposit base over a week or 15% over a month (BNM n.d.a). BNM phased in the new framework over six months. It required companies to continue to comply with the LAR standard during the transition (BNM 1998g).
Legal Authority1
The Central Bank of Malaysia Act 1958 (Revised—1994) established BNM as Malaysia’s central bank (CBM Act 1994, secs. 3–4). Under this framework, and with the finance minister’s approval, BNM could require banking institutionsFNUnder Section 2 of the Central Bank of Malaysia Act 1958 (Revised—1994), “banking institution” was an inclusive term that meant “a licensed bank, a licensed merchant bank or a licensed finance company as defined in the Banking and Financial Institutions Act 1989 or an Islamic Bank” (CBM Act 1994, sec. 2). Banking institutions obtained licenses by submitting applications to BNM and the finance minister with detailed memoranda on constituent documents, governance, audited balance sheets, and more (Banking and Financial Institutions Act 1989, sec. 5). to hold reserves in Malaysian or foreign currency, possibly differentiated by the size or location of banking institutions (CBM Act 1994, secs. 37, 39).
Administration1
With the finance minister’s approval, BNM required banking institutions to meet the SRR (CBM Act 1994, secs. 37, 39).
Governance1
A board of directors was responsible for BNM’s policy and general administration (CBM Act 1994, sec. 8). The board included the governor, three or fewer deputy governors, and five to eight directors (CBM Act 1994, sec. 8). The board informed the finance minister of its monetary and banking policy. The finance minister could issue binding directives if he or she disagreed with their plans and operations. In the event that the board objected to the finance minister’s override, the House of Representatives would hear the objections and reasoning of both sides (CBM Act 1994, sec. 34).
Beyond legal frameworks, research did not uncover specific instances of oversight pertaining to SRR reductions during the AFC.
Communication1
BNM announced changes to the SRR through press releasesFNBNM’s Communication Centre accepted queries about its policy measures by telephone from 8:30am to 12:00am Malaysian Standard Time. International parties could send queries beyond these business hours by fax (BNM 1998i). (BNM 1998a; BNM 1998e; BNM 1998h; BNM 1998j).
In first half of 1998, BNM sought tight monetary conditions (BNM 1998a). However, a contemporaneous Morgan Stanley report suggested that BNM’s SRR reduction on February 16, 1998, had an easing effect. The Business Times quoted this report and characterization on March 9, 1998. BNM Deputy Governor Fong Weng Phak issued a follow-up press release in response on the same day. He pointed to reduced direct lending to the interbank market by BNM and higher interbank lending rates as evidence that monetary conditions remained tight (BNM 1998b). BNM issued a similar clarification press release on June 26, 1998, to reiterate its larger commitment to tightened monetary policy (BNM 1998f).
When the government began to pursue monetary easing in August 1998, BNM said that the “combined impact of the reduction in SRR and [three-month interbank rate would] ease liquidity in the system, making available more loanable funds to borrowers, and at a lower rate” (BNM 1998h; BNM 1998j).
Assets Qualifying as Reserves1
Banking institutions had to hold reserves at the central bank, whether in Malaysian ringgit or other foreign currencies (CBM Act 1994, sec. 37).
Reservable Liabilities1
Research did not identify contemporaneous BNM public statements describing the liabilities covered by reserve requirements.
According to more recent BNM documentation, reservable liabilities included demand deposits, savings deposits, fixed deposits, specific investment deposits, general investment deposits, commodity murabahah,FNAlso known as cost-plus financing; an Islamic financing structure where the buyer and seller agree on an asset’s cost and markup. The markup takes the place of interest, since interest is illegal under Islamic law. Thus, murabahah is a form of credit sale under Islamic law rather than an interest-bearing loan (Young 2020). call deposits, short-term deposits, investments linked to derivatives, other deposits, notional interest deductions (NIDs), repurchase agreements, special deposits (withholding tax), housing development account deposits, amounts due to designated financial institutions, miscellaneous borrowings, interest payable to nonresidents, bills payable to nonresidents, and other miscellaneous liabilities due to nonresidents (BNM 2020).
Reservable liabilities excluded subordinated debt capital, exempt subordinated debt capital, subordinated debt capital with special approval from BNM, and recourse obligations on loans to Cagamas, the National Mortgage Corporation of Malaysia (BNM 2020).
Computation1
BNM computed the SRR for all banking institutions on the basis of the average amount of reserves each institution held during a two-week reserve maintenance period. BNM allowed an institution’s reserves to vary over that period. In May 1998, BNM widened the band for permissible daily variation in reserve assets from ±0.5% to ±2.0%,FNIn a press release announcing the computation change, BNM stated that the 2.0% band was based on a 20% variation on the prescribed SRR rate (BNM 1998d). It is unclear what the mechanics are behind the 20% variation. to increase transparency and liquidity flows in the interbank market (BNM 1998d; BNM 1999).
Eligible Institutions1
In its press releases, BNM stated that the SRR reductions applied to “commercial banks, merchant banks and finance companies” (BNM 1998a). BNM interchangeably used the inclusive term, banking institutions,FNIn its 1998 Annual Report, BNM defined the “banking system” similarly to its definition of “banking institution”: The banking system consisted of commercial banks, merchant banks, and finance companies (BNM 1999). According to the IMF, Malaysia had 37 commercial banks in 1994, of which 21 were domestic-owned, and 16 were foreign-owned. Commercial banks made up approximately 85% of the banking system’s total assets in 1994 (IMF 1994). By year-end 1996, commercial banks accounted for 67% of total banking system assets (IMF 1997). According to data from the World Bank, total assets of the five largest banks as a share of total commercial banking assets were 61.6% in 1998 (World Bank n.d.). to refer to eligible commercial banks, merchant banks, and finance companies in communications to the public (BNM 1998a).
Timing1
Malaysia began to acutely feel the effects of the AFC in the early months of 1998—after the crisis had peaked in Thailand and Korea (BNM 1999; Kaplan and Rodrik 2001). BNM lowered the SRR twice during the second phase of the government’s crisis response: from 13.5% to 10% on February 16, 1998, and from 10% to 8% on July 1, 1998. The central bank reduced its direct lending to the interbank market to offset additional liquidity and set the three-month interbank rate at 11% to maintain tight monetary policy (BNM 1998a; BNM 1998e). By August 1998, BNM began easing monetary policy, as ringgit rates stabilized and inflation calmed (BNM 1998h). To this end, BNM also began to lower the three-month interbank rate (BNM 1998i). BNM reduced the SRR during the third phase of the crisis response on September 1, 1998, from 8% to 6% (BNM 1998h). The central bank lowered the SRR during the fourth phase of crisis response on September 16, 1998, from 6% to 4% (BNM 1998j).
Changes in Reserve Requirements1
Effective February 16, 1998, BNM announced a reduction in the SRR of commercial banks, merchant banks, and finance companies from 13.5% to 10% of eligible liabilities. The announcement stated that BNM would sterilize additional liquidity to the banking system by lowering its direct interbank lending, so as not to accelerate base money growth (BNM 1998a).
BNM began to publish information on April 30, 1998, about its daily operations—cash flow projections, liquidity operations, and money market tender results—to improve transparency (BNM 1998d).
On May 1, 1998, BNM widened the band for permissable daily variation in the average balances required to meet the SRR from ±0.5% to ±2.0%, to give banking insitutions more flexibility in their daily liquidity operations (BNM 1998d; BNM 1999).
On July 1, 1998, BNM further reduced the SRR from 10% to 8% of eligible liabilities. This 2% reduction, they posited, would lower the BLR of commercial banks and finance companies by 0.21% and 0.27%, respectively (BNM 1998e). BNM anticipated an additional MYR 8 billion to the banking system, sterilized by reducing its interbank lending, and closely monitored interbank market liquidity (BNM 1998e; BNM 1998f).
Effective September 1, 1998, BNM dropped the SRR of eligible liabilities of commercial banks, merchant banks, and finance companies from 8% to 6% (BNM 1998h).
On September 16, 1988, BNM lowered the SRR from 6% to 4% of eligible liabilities at banking institutions, finance companies, and merchant banks to “improve the distribution of liquidity among individual banking institutions, thereby enhancing lending capacity of banking institutions” (BNM 1998j).
The two September cuts would inject about MYR 15 billionFN4% of eligible liabilities (8% minus 4%) as of August 31, 1998. into the banking system (BNM n.d.b).
See Figure 2 for a timeline of SRR reductions.
Figure 2: Timeline of SRR Reductions
Sources: BNM 1998a; BNM 1998d; BNM 1998e; BNM 1998h; BNM 1998j.
Changes in Interest/Remuneration1
Malaysia’s SRR was unremunerated, according to an October 1997 IMF report. Malaysian officials told the IMF that “the high level of unremunerated reserves impose[d] a significant implicit tax burden on financial intermediation” (IMF 1997, 15).
Other Restrictions1
Beyond banking institutions—defined as licensed banks, licensed merchant banks, and licensed finance companies—research did not find additional restrictions for institutions eligible for reductions in the SRR (CBM Act 1994, sec. 2).
Impact on Monetary Policy Transmission1
BNM estimated that the February 16 and June 26 reductions to the SRR released MYR 14 billion and MYR 8 billion into the banking system, respectively, although it simultaneously offset these increases by cutting its direct lending on the interbank market (BNM 1998b; BNM 1998e).
By the end of July 1998, BNM determined that its overall policy package had successfully combated inflation; it said that “cautious” easing was in order (BNM 1998g).
BNM reported that the unsterilized SRR reductions on September 1 and 16 injected about MYR 15 billion into the banking system (BNM n.d.b).
Duration1
BNM announced the last change to the SRR from 6% to 4%, effective September 16, 1998. None of the press releases contained a predetermined end date to the SRR reductionFNBNM maintained the SRR at 4% until November 24, 2008, when the central bank lowered the SRR from 4% to 3.5% during the Global Financial Crisis (BNM 2008; BNM n.d.c). (BNM 1998j).
Key Program Documents
(BNM 2020) Bank Negara Malaysia (BNM). 2020. “Statutory Reserve Requirement.” BNM/RH/PD 029-41, May 15, 2020.
BNM document containing information on eligible liabilities to meet the statutory reserve requirement.
(BNM n.d.a) Bank Negara Malaysia (BNM). n.d.a. “New Liquidity Framework III.28.” Accessed August 1, 2022.
Chart in English and Malay on the new liquidity framework announced on July 31, 1998.
(BNM n.d.b) Bank Negara Malaysia (BNM). n.d.b. “Statutory Reserve and Liquidity Asset Requirement III.27.” Accessed July 28, 2022.
Chart in English and Malay of the statutory reserve and liquidity asset requirement from 1980 to 2000.
(BNM n.d.c) Bank Negara Malaysia (BNM). n.d.c. “Statutory Reserve Requirement and Liquidity Ratio 2.26.” Accessed July 7, 2022.
Chart in English and Malay of changes to SRRs by year, date, SRR, and liquidity ratio for commercial banks, finance companies, and merchant banks.
(World Bank n.d.) World Bank. n.d. “5-Bank Asset Concentration for Malaysia.” Accessed July 25, 2022 DDOI06MYA156NWDB. Accessed July 25, 2022.
Interactive graph showing total assets of the five largest banks as a share of total commercial banking assets in Malaysia; Source Code: GFDDOI06.
(Young 2020) Young, Julie. 2020. “Murabaha: Definition, Example, and Financing Under Islamic Law.” Accessed October 19, 2022. Investopedia.
Web page defining murabahah under Islamic law.
Key Program Documents
(Banking and Financial Institutions Act 1989) Banking and Financial Institutions Act 1989 (Banking and Financial Institutions Act). 1989. “Laws of Malaysia Act, 372,” August 23, 1989.
Law pertaining to banking and financial institutions in Malaysia.
(CBM Act 1994) Central Bank of Malaysia Act 1958, Revised 1994 (CBM Act). 1994. “Central Bank of Malaysia Act of 1958,” 1994.
Act establishing the Bank Negara Malaysia Repealed by Act 701 except Part III.
Key Program Documents
(AP-Dow Jones News Service 1997) AP-Dow Jones News Service. 1997. “Mahathir Rules Out IMF Bailout for Malaysia, Rails at Foreigners,” December 31, 1997.
News article covering Malaysia and the IMF during the Asian Financial Crisis.
Key Program Documents
(BNM 1998a) Bank Negara Malaysia (BNM). 1998a. “Monetary Policy,” February 6, 1998.
Press release by BNM announcing changes to the statutory reserve requirement from 135% to 10% and interbank rate from 10% to 11%.
(BNM 1998b) Bank Negara Malaysia (BNM). 1998b. “Reserve Money,” March 9, 1998.
Press release by BNM containing Deputy Governor Fong Weng Phak’s clarifications on monetary policy.
(BNM 1998c) Bank Negara Malaysia (BNM). 1998c. “Stabilisation Package for the Financial Sector,” March 25, 1998.
Press release by BNM announcing a package of macroeconomic measures.
(BNM 1998d) Bank Negara Malaysia (BNM). 1998d. “Measures to Enhance Liquidity Management,” April 30, 1998.
Press release by BNM announcing the permissible daily variation band for the statutory reserve requirement (SRR) and money market operational procedures.
(BNM 1998e) Bank Negara Malaysia (BNM). 1998e. “Statutory Reserve Requirement of Banking Institutions,” June 26, 1998.
Press release by BNM announcing a reduction in the statutory reserve requirement from 10% to 8%.
(BNM 1998f) Bank Negara Malaysia (BNM). 1998f. “Clarification on Statutory Reserve Requirement Reduction,” June 29, 1998.
Press release by BNM reiterating the central bank’s commitment to tightened monetary policy.
(BNM 1998g) Bank Negara Malaysia (BNM). 1998g. “Reduction of the 3-Month Intervention Rate and the Introduction of a New Liquidity Framework,” July 31, 1998.
Press release by BNM announcing the interbank rate and introduction of a new liquidity framework.
(BNM 1998h) Bank Negara Malaysia (BNM). 1998h. “Easing of Monetary Policy,” August 27, 1998.
Press release by BNM announcing changes to the interbank rate, statutory reserve requirement, and base lending rate framework.
(BNM 1998i) Bank Negara Malaysia (BNM). 1998i. “Additional Measures by BNM,” September 3, 1998.
Press release by BNM announcing changes to the interbank rate, new liquidity framework, and statutory reserve requirement.
(BNM 1998j) Bank Negara Malaysia (BNM). 1998j. “Statutory Reserve Requirement of Banking Institutions,” September 7, 1998.
Press release by BNM announcing a reduction in the statutory reserve requirement from 6% to 4%.
(BNM 2008) Bank Negara Malaysia (BNM). 2008. “Monetary Policy Statement,” November 24, 2008.
Press release by BNM announcing a reduction to the statutory reserve requirement from 4% to 35%.
Key Program Documents
(Meesook et al. 2001) Meesook, Kanitta, Il Houng Lee, Olin Liu, Yougesh Khatri, Natalia Tamirisa, Michael Moore, and Mark Krysl (Meesook et al.). 2001. “Malaysia: From Crisis to Recovery,” August 27, 2001.
Paper published by the IMF on the Asian Financial Crisis in Malaysia and the path to recovery.
(BNM 1998k) Bank Negara Malaysia (BNM). 1998k. “Bank Negara Malaysia Annual Report 1997,” March 25, 1998.
Annual Report by BNM in 1997.
(BNM 1999) Bank Negara Malaysia (BNM). 1999. “Bank Negara Malaysia Annual Report 1998,” March 31, 1999.
Annual Report in 1998 by Bank Negara Malaysia.
(Feldstein 1998) Feldstein, Martin. 1998. “Refocusing the IMF,” February 1, 1998.
Foreign Affairs article in which Feldstein argues that the IMF’s demands for structural reforms were unnecessary and counterproductive.
(IMF 1994) International Monetary Fund (IMF). 1994. “Malaysia―Recent Economic Developments (1994).” SM/94/242, September 20, 1994.
IMF document in with corrections to a previous report.
(IMF 1997) International Monetary Fund (IMF). 1997. “Malaysia—Recent Economic Developments (1997).” SM/97/214, November 3, 1997.
IMF report on recent economic developments in Malaysia following the Board discussion of the 1997 Article IV consultation with Malaysia on September 5, 1997.
Key Program Documents
(Meesook et al. 2001) Meesook, Kanitta, Il Houng Lee, Olin Liu, Yougesh Khatri, Natalia Tamirisa, Michael Moore, and Mark Krysl (Meesook et al.). 2001. “Malaysia: From Crisis to Recovery,” August 27, 2001.
Paper published by the IMF on the Asian Financial Crisis in Malaysia and the path to recovery.
(Poon 1999) Poon, Ser-Huang. 1999. “Malaysia and the Asian Financial Crisis: A View from the Finance Perspective.” African Finance Journal, October.
Paper analyzing the Malaysian government’s response to the Asian Financial Crisis, given the political and economic conditions in the region at the time.
(Sundaram 2006) Sundaram, Jomo Kwame. 2006. “Pathways through Financial Crisis: Malaysia.” Global Governance 12, no. 4: 489–506.
Paper analyzing the Malaysian government’s response to the Asian Financial Crisis.
(Kaplan and Rodrik 2001) Kaplan, Ethan, and Dani Rodrik. 2001. “Did the Malaysian Capital Controls Work?” February.
NBER working paper employing a time-shifted differences-in-differences technique to exploit the differences in the timing of crises in Malaysia, Korea, and Thailand.
Taxonomy
Intervention Categories:
- Reserve Requirements
Countries and Regions:
- Malaysia
Crises:
- Asian Financial Crisis 1997