Ringgit now reflective of real economic activity, strength
KUALA LUMPUR: The ringgit is now reflective of the real economic activity and strength and no longer influenced by speculative play, said Bank Negara Malaysia (BNM) Governor, Tan Sri Muhammad Ibrahim.
He said this was the success of the measures taken in March in tackling the offshore trading, which resulted in the ringgit being at a level which is quite strong and with more liquidity in the market.
“Ringgit volatility has declined and the currency is now one of the best performers in the region for two consecutive quarters.
“The currency has been supported by positive domestic developments, however, risks persist on geopolitical tensions between the US and North Korea, as well economic outlook for major economies,” he said at the press conference after announcing Malaysia’s third-quarter Gross Domestic Product numbers.
On monetary policy, he said it would continue to assess the balance of risks surrounding the outlook for domestic growth and inflation and committed to adjusting accordingly once the growth is entrenched.
“This will be when the economic expectations are positive, inflation within what is expected, financial imbalances have not increased significantly or becoming a problem, and this would give a bit of flexibility to adjust to a degree of monetary policy competitiveness.”
On the US interest rate, he said the US authorities had indicated the normalisation of the interest rate and a few central banks had adjusted to the situation.
“Globally, every one has to adjust to the sentiment but if you are in the position of strength like in Malaysia where our growth is quite strong, we have more flexibility in looking at our policy to adjust,” he added.
Muhammad said for Malaysia’s overnight policy rate (OPR), it would be announced in January and the rate would be changing depending on inflation and economic growth.
On cryptocurrency, BNM was expected to come up with guidelines by December this year and it would cover, among others, anti-money laundering and terrorist financing, he said. — Bernama
Source: Borneo Post Online