Friday 29 Mar 2024
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KUALA LUMPUR (March 20): Prime Minister Datuk Seri Najib Tun Razak said the ringgit had stablised since Bank Negara Malaysia (BNM) implemented measures to mitigate the ringgit's volatility in foreign exchange (forex) markets.

The measures include the conversion of at least 75% of companies' export earnings into the ringgit and prohibition of offshore non-deliverable forward ringgit transactions.

"Although it has only been two months since the measures were put in place, we are seeing some encouraging improvements. The ringgit has shown significantly better stability since implementation," Najib said in Parliament today.

"BNM from time to time will introduce new liberalisation measures to expand the local forex, bond and money markets to fulfill the needs of market participants and allow local companies to manage their exposure to forex volatility," he said.

Bloomberg data showed that over the last one year, the ringgit had depreciated to its weakest level against the US dollar at 4.5002 on January 4, 2017 from the firmest point at 3.8442 on April 13, 2016.

Today, the ringgit was traded at 4.4350 against the US dollar at 12:19pm.

At Parliament today, Najib said the biggest factor pressuring the ringgit had been US interest rate hike expectation besides significant foreign holdings of Malaysian bonds.

He said anticipation of US interest rate hikes had caused foreign  holders of Malaysian bonds to rebalance their portfolios, translating into capital outflow and higher demand for the US dollar.

"In the long term, the ringgit will reflect the fundamental strength of the country. To this end, the government's efforts in transforming the country's economy - including the diversification of growth drivers and improved fiscal policies - will ensure a stronger ringgit going forward," he said.

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