KUALA LUMPUR (BLOOMBERG) – Malaysia’s Finance Ministry stated the depreciation of the ringgit will be cushioned by the nation’s robust exterior place and strong fundamentals.
The ringgit market stays strong, with common day by day onshore international change buying and selling quantity amounting to US$12.6 billion (S$17.2 billion) within the 12 months up to now, in contrast with US$11.3 billion in 2021, the ministry stated in a press release on Saturday (April 23).
Average volatility for the 12 months up to now stood at 3.9 per cent versus 4.6 per cent final 12 months, it added.
“The flexibility of the ringgit will continue to benefit the Malaysian economy by facilitating appropriate external sector adjustments and cushioning the domestic economy from adverse global shocks,” the ministry stated.
The Malaysian forex dropped to close a two-year low towards the United States greenback on Friday, monitoring the overall weakening of main and regional currencies amid bets on a Federal Reserve fee hike.
“Due to Malaysia’s open economy and market-determined exchange rate, fluctuations in the ringgit are influenced by both global and domestic factors,” the Finance Ministry stated.
The ringgit is positively correlated to the renminbi as China stays one in every of Malaysia’s most necessary buying and selling companions, it added.
It has additionally been influenced by the Fed’s withdrawal of world liquidity, the ministry stated. The authorities and central financial institution will proceed to observe each monetary and non-financial dangers in the direction of the financial system, it stated.
Bank Negara Malaysia will additionally “contribute to the smooth operation of the domestic foreign exchange market by always ensuring adequate liquidity, to ensure that businesses will be able to plan and execute both trade and investment transactions with greater certainty”, the ministry added.
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