BNM won’t peg Ringgit, says Governor

Nov 11, 2016
BNM Governor Muhammad Ibrahim said the ringgit will continue to face volatility mainly due to uncertainties in the external environment. The value of the ringgit should not be determined by speculative position.
BNM Governor Muhammad Ibrahim said the ringgit will continue to face volatility mainly due to uncertainties in the external environment and the value of the ringgit should not be determined by speculative position.

Bank Negara Malaysia (BNM) will not peg the ringgit despite the recent volatility the currency has been facing due to external environment, Its Governor Muhammad Ibrahim announced today.

“(The) ringgit will continue to face volatility mainly due to uncertainties in the external environment. The value of the ringgit should not be determined by speculative position,” he said.

The ringgit depreciated against most major and regional currencies during the third quarter, he said at a press conference after announcing a 4.3% Gross Domestic Product growth for the third quarter this year.

He said this was a reflection of the shift in investor sentiments and the rebalancing activity of portfolio investors throughout the quarter, driven mainly by external events.

“While all regional currencies were affected by the continued uncertainty over the timing of US interest rate normalisation, the ringgit and the currencies of other commodity-exporting countries were faced with additional adjustments due to the highly volatile global crude oil prices during the quarter,” he said.

Overall, the ringgit depreciated by three per cent against the US dollar during the quarter. The ringgit also depreciated against the euro (-3.9%), the Japanese yen (-4.2%) and the Australian dollar (-5.5%), but appreciated against the pound sterling (0.2%).

The ringgit also depreciated against all regional currencies except the Philippine peso, by between 1.8% and 7.3%.

Source: Bernama

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