BANK Negara Malaysia (BNM) has announced today (Sept 23) that it will not be re-pegging the ringgit or resorting to capital controls while continuing to monitor financial market conditions.
Instead, BNM governor said that 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, adding that this will provide a “more enduring support for the ringgit”.
The central bank also 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.
“The US dollar has strengthened significantly due to aggressive monetary policy tightening in the United States,” read the statement.
“The tighter global financial conditions and higher volatility in the foreign exchange markets are not expected to derail Malaysia’s economic growth.
“The tighter global financial conditions and higher volatility in the foreign exchange markets are not expected to derail Malaysia’s economic growth.
“The economy expanded by 8.9% in the second quarter and will continue to be driven by further improvements in labour market conditions and higher tourism activity.
“Exports are underpinned by our highly diversified products and markets. The domestic financial system is well capitalised with ample liquidity, and financial intermediation continues to be supportive of the economy.”
Today, the ringgit opened marginally lower against the US dollar due to a lack of buying momentum as demand for the greenback remained strong on the back of its safe-haven status.
At 9am, the local currency had fallen to 4.5670/5710 against the greenback from 4.5660/5695 at Thursday’s close. – Sept 23, 2022
