KUALA LUMPUR: The Japanese Chamber of Trade and Industry Malaysia (Jactim) has urged the Pakatan Harapan government to review a central bank regulation that exporters retain only 25% of export proceeds in foreign currency and to convert the balance 75% into ringgit.
Speaking at a press conference yesterday, Jactim president Hiroyuki Imizu said that the regulation adds to costs and is an additional burden to exporters as they have to constantly convert currencies.
The regulation was implemented by Bank Negara Malaysia (BNM) in December 2016 to help reduce volatility in the ringgit.
While Imizu acknowledged BNM’s reasoning behind the regulation, he said it could discourage exporters and affect the confidence of foreign investors in the country who may choose to invest elsewhere.
"Japanese manufacturers in Malaysia are selling to the local market and exporting globally as well because Malaysia’s market is not very big,” Imizu said, adding that since the US dollar is widely used for importing materials and exporting goods, the regulation substantially increases business and investment costs.
“So I hope in the near future the government will review and mitigate this regulation.”