The Second Finance Minister said the ANZ and Macquarie Bank case was clear-cut evidence that such speculative activity was rampant in offshore markets.
The media earlier reported that the two banks had admitted to their traders of trying to rig a key benchmark rate in Malaysia’s foreign exchange markets, breaking cartel laws and resulting in multimillion-dollar fines.
Johari said he had advised investors to conduct such activities in Malaysia where their investments are protected and transparent and speculators are not able to take advantage.
He said Bank Negara’s recent move to curtail the offshore forex market was fully justified.
“There is evidence of heavy speculative activities going on abroad, so I fully support Bank Negara’s action in ensuring more foreign exchange as well as hedging activities are conducted onshore,” he told reporters after flagging off the Kampung Baru MTB Challenge here today.
He added that Bank Negara had in place the oversight and surveillance mechanisms to ensure all parties were protected from speculative activity in the offshore market.
Asked if speculative activity on the ringgit in offshore markets was still in play, Johari said: “You cannot stop people speculating on our currency.”
He said in order to prevent this activity from harming the ringgit, the government had to create good economic fundamentals in the country.
“We have to show them that we want to intensify our credibility, the trust in our system, so that people will have faith in it.
“I believe we have good fundamentals and the currency will come back to the level where it is supposed to be,” he said.