Press Release on Ringgit

Press Release on Ringgit

Bank Negara Malaysia (BNM) continues to closely monitor and ensure orderly financial markets condition amidst external developments that have led to persistent strength in the US dollar against almost all currencies, including the ringgit. The US dollar has strengthened significantly due to aggressive monetary policy tightening in the US.

The tighter global financial conditions and higher volatility in the foreign exchange markets are not expected to derail Malaysia's economic growth. The economy expanded by 8.9% in the second quarter and will continue to be driven by further improvements in labour market conditions and higher tourism activity. Exports are underpinned by our highly diversified products and markets. The domestic financial system is well capitalised with ample liquidity, and financial intermediation continues to be supportive of the economy.

Ringgit movements will continue to be market determined. The foreign exchange market continues to function and intermediate effectively. Daily onshore FX transaction volume has been increasing throughout, reaching a current average of USD13.3 billion against USD11.3 billion in 2021, amid two-way flows. Bond market activity remains healthy, well supported by institutional investors and financial institutions. BNM's market operations will ensure sufficient liquidity and orderly functioning of financial markets.

"Malaysia remains an open economy. Rather than resorting to capital controls or re-pegging of the ringgit, the policy priority now is to sustain economic growth in an environment of price stability and to further strengthen domestic economic fundamentals through structural reforms. This will provide a more enduring support for the ringgit," said Bank Negara Malaysia Governor Tan Sri Nor Shamsiah.