KUALA LUMPUR: The measures implemented by Bank Negara Malaysia (BNM) last December in support of the ringgit have been successful, Governor Muhammad Ibrahim says.
He said the outcome of the measures included halving the one-month implied volatility, as well as recovering the onshore foreign exchange to a stable daily average volume of US$10 billion (RM42.82 billion), an increase of 1.25 times before the measures.
“Seven months ago, we took swift and pragmatic action to implement foreign exchange market development measures to stabilise it.
“I am pleased to report that these measures have been successful,” he said in his plenary address at the Invest Malaysia Kuala Lumpur 2017 conference here today.
Muhammad said the measures, which among others, allowed exporters to only retain up to 25% of export proceeds in a foreign currency, was implemented to address the imbalance between supply and demand for the ringgit.
“The idea is to ensure that demand and supply are aligned,” he added.
He said Malaysia had always been open, friendly and fair to foreign investors who have been major partners in the nation’s economic growth.
“Foreign investors have contributed significantly towards the expansion of Malaysia’s manufacturing sector, the creation of employment and birth of economic hubs,” he said.
According to Muhammad, foreign investments in the country had also yielded significant returns for investors at an average of 13%, one of the highest in Malaysia and higher than the country’s nominal gross domestic product (GDP) growth of 7.7%.
“Clearly, Malaysia has been a regional profit centre where foreign investments are protected and allowed to operate in a conducive environment,” he said.
He also said Malaysia did not impose any restriction on the repatriation of profits, allowing investors to move it freely, even during difficult times.
Muhammad said Malaysia’s long-term growth prospects also remained favourable reinforced by both naturally occurring domestic trends and policy consideration, deliberation and action.
“Time and again, Malaysian policymakers have continuously supported growth by removing structural impediments and promoting an enabling environment for new growth areas to flourish,” he explained.
He said Malaysia had evolved significantly in the last 60 years and welcomed businesses in providing an opportunity to profit.
“We are pragmatic and agile in our policies to protect the interests of all.
“The government will always look forward to a mutually beneficial relationship with anyone interested in doing business in the country,” Muhammad added.
The two-day conference, ending tomorrow, is a premier annual event showcasing the diversity and strength of Malaysia’s capital market.