KUALA LUMPUR: The ringgit market is very deep and transactions are very large, and it would not be easy for anyone to manipulate it.

Replying to a question on the matter, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz (pic) said: “I just want to say that our markets are deep and the volume of the transactions in the foreign exchange market is 6 to 7 billion (US dollars) daily, 3 to 4 trillion (US dollars) during 2014,” she said.

“I would like to say that of course, from time to time, there are movements, but markets can actually settle down,” she added.

Zeti said the currency market is affected by both domestic and international events.

Nonetheless, she said if there is any disruption to the market that affects the functioning of the foreign exchange market Bank Negara will conduct an investigation. She did not, however, say if any is being done currently.

Although the ringgit had fallen 11.9% against the US dollar, in tandem with other major currencies from Sept 1 last year to Feb 10, Zeti is optimistic that once the negative sentiment blows over, economic fundamentals will take over and the ringgit will stabilise.

“Overall, the ringgit depreciated by 6.4% against the US dollar during 4Q14,” she said, adding that the ringgit depreciated against the Australian dollar (-0.1%), the pound sterling (-2.2%), the euro (-2.3%) and all regional currencies. She noted that the ringgit appreciated by 2.3% against the Japanese yen.

Zeti said that between Jan 1 and Feb 10, 2015, the ringgit depreciated against the US dollar by 2.4%. The ringgit also depreciated against the pound sterling (-0.3%) and Japanese yen (-3.2%), but appreciated against the euro (4.7%) and Australian dollar (2.2%).

Against all regional currencies, the ringgit broadly depreciated by between 0.1% and 3.3%, she noted.

Nevertheless, Zeti said the Malaysian financial system remained resilient throughout the quarter against the backdrop of significant decline in oil prices, which had impacted the financial market and exchange rate movements.

Financial intermediation remained well supported by sound financial institutions, orderly financial market conditions and sustained confidence in the financial system, she pointed out, noting that the domestic financial stability is expected to remain positive, albeit in the face of a more challenging operating environment.

This article first appeared in The Edge Financial Daily, on February 13, 2015.