Bank Negara monitors ringgit closely to ensure orderly financial market conditions

KUALA LUMPUR: Bank Negara continues 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.

In a statement, the central bank said the US dollar had strengthened significantly due to aggressive monetary policy tightening in the US.

“Ringgit movements will continue to be market determined. The foreign exchange market continues to function and intermediate effectively,” Bank Negara said.

It noted that daily onshore FX transaction volume has been increasing throughout, reaching a current average of US$13.3bil against US$11.3bil in 2021, amid two-way flows.

It added that bond market activity remained healthy, well supported by institutional investors and financial institutions.

Bank Negara’s market operations will ensure sufficient liquidity and orderly functioning of financial markets.

The economy expanded by 8.9% in the second quarter and will continue to be driven by further improvements in labor market conditions and higher tourism activity. Exports are underpinned by our highly diversified products and markets.

Bank Negara said the domestic financial system was well capitalized with ample liquidity, and financial intermediation continues to be supportive of the economy.

Governor Tan Sri Nor Shamsiah Mohd Yunus said Malaysia remains an open economy.

“Rather than resorting to capital controls or re-pegging of 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 said.

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