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About the Bank
Established on 26 January 1959 under the Central Bank of Malaysia Act 1958 (Revised -1994). It is a statutory body wholly owned by the Government of Malaysia with the paid-up capital progressively increased, currently at RM100 million. The Bank reports to the Minister of Finance, Malaysia and keeps the Minister informed of matters pertaining to monetary and financial sector policies.
Roles and Functions
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.
Other important roles of the Bank are being a banker and adviser to the Government, playing an active role in advising on macroeconomic policies and managing the public debt. It is also the sole authority in issuing currency as well as managing the country's international reserves.
The roles of the Bank are supported by 37 departments/units in the Bank covering seven functional areas as follows:
Economics & Monetary Policy
Primarily provides good technical and research support on growth-related issues to enhance formulation of monetary and credit policies in promoting monetary stability and ensuring the availability of adequate credit to finance economic growth.
Investment and operations
Manage domestic liquidity and exchange rates to ensure that monetary policy targets are achieved as well as managing external reserves to safeguard its value and optimise its returns. It also has the responsibility of providing advice and assistance to the Government in the area of debt and fund management and contributing to domestic financial market development.
Regulation
Promote financial sector stability through the progressive development of sustainable, robust and sound financial institutions and financial infrastructure, thus enabling a competitive local financial industry to be resilient against the changing future environment as well as leads initiatives to enhance access to financing. It also formulates and implements policies and strategies towards building and positioning Malaysia as a premier integrated Islamic Financial Centre and enhance the financial capability of consumers.
Payment systems
Develop policies and strategies to promote reliable, secure and efficient clearing, settlement and payment systems in the country.
Supervision
Develop, enhance and implement an effective surveillance framework to ensure safety and soundness of financial institutions and to enforce sound practices in them.
Organisational development
Spearhead the Bank's strategic management, organisational-performance management and programme management functions to drive its performance-improvement processes and strengthening the capacity building of the Bank. It also leads and drives human resources initiatives and other strategic activities to ensure that the overall Human Capital Management framework is implemented effectively.
Communications
The communications function has assumed increasing importance in response to the heightened demands of the various stakeholders, seeking greater transparency and disclosure.
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