kuala lumpurAccording to Bank Negara Malaysia (BNM) Financial Markets, the ringgit was one of the world’s best performing currencies in Q3 2024 (Q3 2024), down 14.4% against the US dollar and 11.4% year-to-date. Committee (FMC).
The local currency started solidly at 4.2845/2950 and continued its upward momentum, ending at 4.2800/2830 against the US dollar at 6pm today, compared to yesterday’s closing price of 4.2850/2895.
As of 8am, the local currency had strengthened against the dollar to 4.2845/2950, compared to Tuesday’s closing price of 4.2850/2895.
In a summary of its Oct. 1 meeting released today, the FMC said local currency performance was driven primarily by the Federal Reserve’s 50 basis point cut in interest rates and clarity on the trajectory for further cuts. said.
“Despite the strong performance, the Committee notes that the ringgit remains positive, including the continued collaborative efforts by the government and BNM to encourage the repatriation and conversion of foreign income proceeds from government-linked enterprises and government-linked investments. “Companies and Corporations” focused on key developments supporting performance.
“These contributed to ample liquidity in the domestic foreign exchange (foreign exchange) market, which recorded an average daily trading volume of $17.6 billion,” it said.
FMC added that current arrangements can be maintained to ensure better liquidity in the onshore foreign exchange market.
The report also noted that investor confidence in Malaysia has improved due to the country’s strong economic growth and the government’s continued commitment to structural reforms.
The report said, “Amid KLCI’s strong performance and normalization of Malaysian Government Securities (MGS) and US Treasury (UST) spreads, significant overseas inflows into portfolios will be expected in Q3 2024. observed,” he said.
Committee members also opined that frequent investor engagement by the authorities would be beneficial in raising awareness of Malaysia as an attractive investment destination, and emphasized the importance of continued policy coherence and coherence. I reconfirmed it.
“Members shared their observations on changes in corporate behavior amid ringgit recovery.
“There has been a shift in sentiment among exporters, with increased interest in converting export proceeds into cash, and importers have also reduced their tendency to front-load by purchasing only the quantities needed for their business operations,” the report said. .
The committee also discussed strategies to strengthen the domestic bond and sukuk markets, and discussed measures to increase liquidity and expand the investor base in the corporate bond and sukuk markets.
“In the short term, the introduction of corporate bonds and sukuk trading will be a key initiative as part of the evaluation of market development efforts within the principal-dealer framework.
“In addition to Malaysian government bonds, it also includes investor engagement sessions with key industry players to familiarize non-residents with Malaysian company names and sukuk structures,” the report said. .
