Rise of the US dollar: The movement of the ringgit continues to be determined by the market
KUALA LUMPUR: Bank Negara Malaysia (BNM) continues to closely monitor and ensure that the financial market remains orderly in the event of external developments that have caused the US dollar to remain strong compared to almost all currencies, including the ringgit.
However, the central bank said that the movement of the ringgit will continue to be determined by the market.
The Governor of Bank Negara Malaysia (BNM), Tan Sri Nor Shamsiah Mohd Yunus in a statement explained that the foreign exchange market continues to function and mediate effectively.
“Malaysia remains an open economy. The current policy priority is to support sustainable economic growth in a stable price environment and further strengthen the fundamentals of the domestic economy through structural reforms rather than by implementing capital controls or re-pegging the ringgit.
“This will provide more continuous support for the ringgit,” she said.
He said, the amount of local daily foreign exchange transactions continued to increase to reach the current average of US$13.3 billion compared to US$11.3 billion in 2021 due to two-way exchange flows.
She explained, the value of the US dollar has strengthened significantly due to the aggressive tightening of monetary policy in the US.
She said that tighter global financial conditions and greater uncertainty in the foreign exchange market are not expected to affect Malaysia’s economic growth.
Finance Minister, Tengku Datuk Seri Zafrul Tengku Abdul Aziz on Wednesday said the government through BNM does not plan to peg the ringgit to the US dollar at this time because the move has huge risks and substitutions.
He said, if the peg is implemented, Malaysia needs to fully follow the country’s monetary policy whose currency is the ‘reference’ or basis for the ringgit peg.
source – Astro Awani