Malaysia works to strengthen local currency
Kuala Lumpur (VNA) - Malaysia's ringgit is expected to
continue to strengthen this year, trading at 4.5 RM against the US dollar by
year-end, driven by the country’s positive economic performance, Finance Minister II Amir Hamzah Azizan has said.
Coordination between the Ministry of Finance and Bank Negara
Malaysia (BNM), as well as joint efforts between government-linked investment
companies (GLCs) and government-linked companies (GLICs) will help increase
inflow into the foreign exchange market and strengthen the ringgit’s value, he
said at the question and answer session in the House of Representatives.
He also said BNM is also always ready to intervene in the
foreign exchange market to curb currency movements that are considered
excessive.
According to Azizan, the efforts made by the government are
effective and there is no need to use instruments such as pegging the ringgit
or shutting down the ringgit exchange as was done during the Asian Financial
Crisis.
He said the ringgit’s current depreciation is largely driven
by the strengthening of the US dollar and the uncertainty over China’s economic
growth, which has also affected other regional currencies.
As of February 28, the ringgit has depreciated 3.5% against
the US dollar, in tandem with regional currencies such as the Japanese yen
(-6.3%), the Thai baht (-4.7%) and the Korean won (-3.3%).
Azizan said BNM monitors the conversion of export proceeds
into ringgit by exporting companies, and is continuing efforts to encourage the
ringgit’s use for export settlements to reduce dependence on the US dollar.
The government also controls overseas investments by private
companies to reduce pressure on the ringgit, including encouraging them to
prioritise domestic investments as well as delaying new overseas investments,
he added./.