Bank Negara really had learned it!

They left the benchmark rate unchanged for I-dont-know-how-long! Actually there are a lot of other ways to manage money flow in and out of economy. We dont really depend on the interest rate alone. If you listen to the Monetarists, of course throwing away the interest rate knobs will be a heresy. But, in some other economies they are living without it and they are prospering!!!I got the feeling that Bank Negara is trying to be less dependant on the interest rate mechanism so that the economy can be less vulnerable to the volatility.

Fundamentally, do we need to raise the rates to get money in (In the first place, do we need the money in?)? I believe 300 billion in the system from the EPF alone is enough to ensure liquidity. But there are other factors like return potential, investment effectiveness, strong currency, strong economic management, political stability etc that can keep the money coming in.The interest rate is just a mean, there are some other ways that can keep the economy prosperous. Last time pensioner complaining that low interest rates can be destructive to their income stream, but nowadays with some other hedging instruments like options, and more currency fund available had produced good results even if they put their money in unit trust, but of course they have to pick the right manager.

We should learn from Japan (which I believe Madam Governor already did) on how they keep the rates low and still prosper! Obviously there are other options rather than the monetarist way!Pump priming perhaps might create back lash politically, but if I were the private sector, investing in the down turn will be the best opportunity which Buffet will take less than 10 days to decide! Perhaps we can learn something from the socialist...