Malaysian PM Najib Says Central Bank Will Keep Supporting Ringgit

Malaysia's consumer price index rose to an eight-year high in February, but is unlikely to lead to any change in monetary policy. (Reuters Photo/Bazuki Muhammad)

By : Joseph Sipalan | on 3:30 PM March 20, 2017
Category : International, SE Asia

Kuala Lumpur. Malaysian Prime Minister Najib Razak said on Monday (20/03) that the central bank will keep acting to support the ringgit and that moves already taken to stem its decline have stabilized 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 percent 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 "liberalization" 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 about 4.3 percent 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 percent and on Monday was trading around 4.4290 to the dollar.

Reuters

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