Malaysia govt denies reported subsidy scheme for Proton car buyers

Malaysia govt denies reported subsidy scheme for Proton car buyers

	Published : Mon, 23 Jul 2007 12:45 By : Agencies Print this Story

KUALA LUMPUR (Thomson Financial) - Malaysia's Second Finance Minister Nor Mohamed Yakcop said Monday the government has not approved any proposal offering subsidies to car owners who voluntarily scrap their old cars and buy new ones made by national car maker Proton.

'No, we have not approved (such a proposal),' he said.

Citing sources, the Edge Financial Daily reported earlier today that the government will offer a 5,000 ringgit subsidy to car owners who voluntarily scrap their old cars, at least 15 years old or older, and replace them with Proton models.

'The report is not correct,' said Nor Mohamed. 'There may be some studies on this subject but at this point there is nothing,' he told reporters.

The minister declined to comment on the progress of ongoing discussions between Proton and German car maker Volkswagen AG for a possible strategic alliance.

'No, at this point I have nothing to add to what I have said before,' he said.

On another subject, Nor Mohamed said the government will let market forces decide on whether there is a need for more mergers among local banks.

'There is no move on the part of government to come up with another measure to further reduce the number of banks, but we have no problem if the private sector wants to merge,' he said.

'At this point there is no policy change.'

The number of banks in Malaysia dropped to nine from 10 after the merger between Bumiputra-Commerce Holdings Bhd and Southern Bank Bhd two years ago.

Nor Mohamed also brushed aside speculation that the government plans to further liberalize its foreign exchange policies.

'Bank Negara Malaysia has already answered (that question). They said no.'

Meanwhile, Nor Mohamed said the government is confident that the inflation rate this year will be contained within the range of 2.0 to 2.5 percent.

'We see no reason to change the forecast and we see no problem with inflation,' he said.

(1 US dollar = 3.41 ringgit)

aipeng.soo@thomson.com

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