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BNM says ringgit will continue to be market determined

0 month ago, 23-Sep-2022

The central bank said ringgit movements will continue to be market determined and the foreign exchange market continues to function and intermediate effectively. Bernama photo

KUALA LUMPUR (Sept 23): Bank Negara Malaysia (BNM) said it will continue to closely monitor and ensure orderly financial market conditions amid external developments that have led to persistent strength in the US dollar against almost all currencies, including the ringgit.

However, the central bank said that ringgit movements will continue to be market determined and the foreign exchange market continues to function and intermediate effectively.

Daily onshore forextransaction volume has been increasing throughout, reaching a current average of US$13.3 billion against US$11.3 billion in 2021, amid two-way flows.

Bond market activity remains healthy, well supported by institutional investors and financial institutions, it said in a statement.

The US dollar has strengthened significantly due to aggressive monetary policy tightening in the United States. The ringgit fell to 4.5670/5710 against the greenback at the opening todaycompared with4.5660/5695 at yesterdays close.

BNM governor Tan Sri Nor Shamsiah Mohd Yunus said Malaysia remains an open economy. Rather than resorting to capital controls or re-pegging the ringgit, the policy priority now is to sustain economic growth in an environment of price stability and to further strengthen domestic economic fundamentals through structural reforms.

This will provide a more enduring support for the ringgit, she added.

The central bank also saidtighter global financial conditions and higher volatility in foreign exchange markets were not expected to derail Malaysia’s economic growth.

Malaysias economy expanded by 8.9 per centin the second quarter and will continue to be driven by further improvements in labour market conditions and higher tourism activity, while exports were underpinned by the countryshighly diversified products and markets, the central bank said.

The domestic financial system is well capitalised with ample liquidity, and financial intermediation continues to be supportive of the economy, it said in a statement.

Hence, BNM said its market operations will ensure sufficient liquidity and the orderly functioning of financial markets. — Bernama





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