Meta Pixel Code

News and Blog

PresenterDr Akhtar Hossain, Associate Professor of Economics, Newcastle Business School, University of Newcastle, Australia

Date: 3 August 2015

Time: 3.00pm to 4.30pm


This research highlights the issue of persistent inflation volatility in Malaysia from the late 1950s and draws implications on monetary policy for stabilizing inflation and economic growth. The findings provide some justification for deployment of a monetary aggregate as an instrument of monetary policy for price stability, especially when the flexibility, and hence the effectiveness, of a zero-bound interest rate has become doubtful as an instrument of monetary policy in a low-inflation environment.

The article draws conclusion that a rule-based monetary policy, such as monetary targeting or inflation targeting, remains appropriate for an open-economy like Malaysia to maintain low and stable inflation provided that it adopts a more flexible, if not perfectly floating, exchange rate system, with or without some market-based capital controls.