BNM says efforts to boost currency inflow yielded ‘encouraging’ results
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KUALA LUMPUR (Nov 14): Malaysia’s efforts to encourage conversion and repatriation of ringgit has yielded “encouraging results”, the central bank said on Friday.
A programme that provides policy flexibility to domestic corporates to repatriate foreign currency investment income and convert them into ringgit has recorded more than US$2 billion (RM8.26 billion) of inflows since the Qualified Resident Investor programme was fully rolled out in July by Bank Negara Malaysia (BNM).
“BNM will continue to ensure the orderly functioning of the domestic foreign exchange market and two-way flow through the coordinated efforts with the government and corporates,” the central bank said.
The ringgit has been on a blistering rally, appreciating nearly 8% against the greenback so far this year, making it the best performing currency in Asia year to date. On Friday, the ringgit was trading around 4.13 per dollar.
As a policy, Malaysia does not use the ringgit as a lever to bolster its export competitiveness and its external sector remains resilient even amid a rally in the ringgit, BNM governor Datuk Seri Abdul Rasheed Ghaffour said at a news conference.
He reiterated that the ringgit is fully market-determined and the central bank’s role is only limited to maintaining an orderly market.
“We don't set any number or forecast for the currency,” he said. “Our role is to ensure there is no excessive volatility.”
Year to date, the ringgit has appreciated by 5.3% on a nominal effective exchange rate basis against Malaysia’s major trading partners and by 8.2% against the US dollar.
The US Federal Reserve’s monetary policy easing in September, coupled with expectations of further rate cuts and reduction in tariff-related uncertainties, helped support the ringgit, Abdul Rasheed noted.
“On the domestic front, Malaysia’s positive economic prospects together with the government’s commitments to structural reforms and fiscal sustainability have become more visible,” he said. “This will continue to provide medium-term support to the ringgit.”
Gross exports accelerated and expanded 6.7% in the third quarter from a year earlier, supported largely by sustained electrical and electronic demand. A sharp rebound in net exports, which meant exports grew faster than imports, propped up the economy during the quarter.
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