kuala lumpur: Bank Negara Malaysia (BNM) welcomed Malaysia’s removal from the US currency manipulation watch list, confirming the ringgit’s market-leading position.
Governor Datuk Seri Abdul Rashid Ghafoor stressed that Malaysia has never used exchange rates to gain a competitive advantage in the market.
“This is therefore an affirmation of our beliefs and an affirmation of our position on this issue. This is a welcome development,” he said today. Gross Product (GDP) stated at a press conference.
A semiannual report released by the U.S. Treasury on Thursday, November 14, lists countries that run large trade surpluses with the United States and actively intervene in foreign exchange markets to gain a competitive advantage. I’m monitoring it.
The governor also stressed that more importantly, the movement of the ringgit should reflect the country’s economic fundamentals.
Also read: US Treasury removes Malaysia from trading partner watch list
“Our presence in overseas markets is therefore to ensure that there are no undue fluctuations and that the market is orderly so that companies can operate smoothly,” he said.
Abdul Rashid said the ringgit appreciated by 14.9% against the US dollar in the third quarter and 3.1% since the beginning of the year as of Nov 13.
“The ringgit’s performance in the third quarter was mainly driven by the US Federal Reserve’s shift to an accommodative monetary policy stance, including a cumulative 75 basis point cut in the federal funds rate in September and November. was caused.
“We are seeing positive results in terms of our efforts to encourage businesses to remit their export earnings to ringgit and investors to take home their earnings and exchange them for ringgit,” he said. He pointed out, adding that this had two healthy benefits. Market trends and the appreciation of the ringgit itself.
BNM Governor said that in Malaysia, the average daily foreign exchange trading volume has increased from US$15 billion (US$1 = RM4.48) to US$18.2 billion since the beginning of the year.
Also read: Ringgit opens slightly higher against US dollar
“Previously, the ringgit depreciated by 10% between February and October. In terms of the nominal exchange rate, it depreciated by 9.8%,” he said, adding that this was due to changes in policy shifts in developed countries, especially the US.
Abdul Rasheed believes the ringgit will benefit from strong domestic growth, momentum from ongoing government reforms and a narrowing interest rate differential between the US and Malaysia.
He said financial market participants also expect further interest rate cuts from the U.S. Federal Reserve heading into 2025.
Nevertheless, Abdul Rashid noted that a change in the US presidency could cause initial instability, but as seen in previous examples, Malaysia is not prepared to bounce back. I reassured him that he was there.
“Our ringgit appreciated about 8% after the initial volatility. So we can expect the same now,” he said.
