BNM says ringgit will continue to be 'market determined' amid rising US dollar
23 Sep 2022 02:47pm
Ringgit movements will continue to be market determined and the foreign exchange market continues to function. - 123RF Photo
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 forex transaction 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 today compared with 4.5660/5695 at yesterday’s 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 said tighter global financial conditions and higher volatility in foreign exchange markets were not expected to derail Malaysia's economic growth.
Malaysia’s economy expanded by 8.9 per cent in 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 country’s highly 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
