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Najib says Bank Negara will keep supporting ringgit

 | March 20, 2017

Bank Negara Malaysia's moves includes requests for written commitment from foreign banks to cease trading the currency on the offshore non-deliverable forwards market.

najib_bnm_ringgit_16001KUALA LUMPUR: Prime Minister Najib Razak said on Monday the central bank will keep acting to support the ringgit and that moves already taken to stem its decline have stabilised the currency.

Bank Negara Malaysia (BNM) has taken several steps since late last year to support the ringgit, including asking for a written commitment from foreign banks to cease trading the currency on the offshore non-deliverable forwards market.

In December, the central bank announced measures to boost liquidity and encourage more domestic trade of the ringgit, including allowing exporters to retain only up to 25% of export proceeds in a foreign currency.

“Although it has been only two months since the announcement of these measures, there are signs showing encouraging results,” Najib said in reply to a question in parliament.

“The most important is that the ringgit has shown significant stability since these measures became operational,” he said.

The prime minister said Malaysia’s international reserves “will continue to be used to stop volatility in the currency market”.

Malaysia’s gross international reserves were $95 billion as of Feb. 28, unchanged from Feb. 15, according to the central bank.

Najib also said BNM will introduce “liberalisation” moves from time to time to develop the foreign exchange and bond markets, and enable businesses to manage currency exposure. He did not give any details.

In 2016, the ringgit weakened by about 4.3% against the dollar.

On Jan. 4, the currency hit a 19-year low of 4.4980 to the dollar. But so far this year, it has strengthened 1.2% and on Monday was trading around 4.4290 to the dollar.

 


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