Bank Negara announced today it will introduce a new interest rate framework in the next few months to boost the efficiency of the financial markets but said this will not affect its monetary policy.

Bank Negara is taking advantage of a strengthened banking system and improved global financial infrastructure to put in place a "smooth and stable transition" into the new framework to facilitate more efficient pricing in the financial system, said governor Zeti Akhtar Aziz.

"The window of opportunity will be taken during the period when the interest rate policy will remain unchanged," she told a news conference when unveiling the central bank's 2003 annual report.

No details yet

"With monetary and financial stability, a strengthened banking system and progress in financial infrastructure development, it is timely for a transition to the new interest rate framework ... it will be implemented in the next few months."

She did not give details but said the new framework would "ensure access to financing at rates supportive to economic activity and that depositors receive favourable rates of return on their deposits."

The Bank Negara report said current low interest rates were expected to "remain for some time to come." - AFP