Published March 26, 2009

No buying of bonds to lower borrowing costs

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(SINGAPORE) Malaysia's central bank has ruled out buying government bonds to help keep long-term borrowing costs down, Governor Zeti Akhtar Aziz said.

'So far, we have not assumed that role and we don't anticipate that we will be assuming that role,' she said in Kuala Lumpur yesterday. 'We have not resorted to this kind of policy before.'

Policy makers in the US, the UK, Japan and Switzerland have announced plans to buy government and corporate bonds to inject cash into the system and hold down yields as benchmark interest rates approach zero.

So-called quantitative easing taken the Fed, the Bank of Japan and the Bank of England this month are 'uncharted territories and we have to monitor closely', she said.

Bank Negara is allowed to buy as much as 10 per cent of bonds at monthly treasury auctions. -- Bloomberg