Page last updated at 11:22 GMT, Monday, 20 October 2008 12:22 UK

Malaysia acts to prevent slowdown

Malaysian ringgit note
Malaysia hopes the new measures will counteract a slowdown in the economy

Malaysia has unveiled a number of measures to boost its stock market and attract more foreign investment in expectation of slower growth in 2009.

The government will invest 5bn ringgit (814.4m; $1.4bn) into a state agency that will invest in undervalued stocks.

Malaysia's stock market has plummeted 37% this year.

The government will also speed up market liberalisation and ease rules concerning foreign investors buying industrial land and property.

Despite the action, Malaysian finance minister Najib Rasak has denied the country is in the grip of a financial crisis.

"Our stock market is affected by the sentiments in other markets, but I would like to stress we are not in a financial crisis and certainly we should not talk ourselves into one," said Mr Rasak.

Malaysia is expected to reduce its economic growth forecast of 5.4%. The Malaysian Institute of Economic Research has said the growth rate could fall to 3.4% next year.

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