KUALA LUMPUR: The government’s decision to use a managed float mechanism to determine the pump price of RON95 petrol and diesel will not bring about any inflationary consequences, said Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz (pic).

“[Oil] prices are now softening and therefore this is good for consumers because they will benefit from the lower prices. This also helps the government in terms of the burden of subsidies in the budget. This is a positive development that will not have inflationary consequences,” said Dr Zeti.

Commenting on the recent announcement by Domestic Trade Cooperative and Consumerism Minister Datuk Hasan Malek that there will be no more subsidy for RON95 and diesel from Dec 1, Dr Zeti said the subsidy removal will not change BNM’s views on monetary policy.

Dr Zeti, who was speaking to reporters after officiating at the launch of the Society for Worldwide Interbank Financial Telecommunication’s Kuala Lumpur Corporate Service Centre yesterday, also said there will be tremendous cost savings from the enhancement of the electronic payment (e-payment) infrastructure in the country.

“These are cost savings to businesses and to the government. [There will be] an instantaneous impact on your financial position and gains on efficiency,” she said.

On the amount of cost savings achieved so far through the use of e-payments, Dr Zeti said the central bank will be coming up with a calculation of the amount soon, but reiterated that the savings amount will be tremendous.

This article first appeared in The Edge Financial Daily, on November 25, 2014.