KUALA LUMPUR, March 6 — Bank Negara Malaysia (BNM) is fully committed to ensuring the ringgit’s stability in light of the government and the central bank’s coordinated efforts to sustainably increase inflows into the foreign exchange (forex) market.
BNM governor Datuk Abdul Rasheed Ghaffour said the bank has elevated its engagements with government-linked companies and government-linked investment companies to encourage more consistent repatriation and conversion of their foreign investment income.
“We are also stepping up our engagements with international investors to showcase the positive prospects of Malaysia, and the country remains highly attractive for investment and business.
“Thus, with the current ringgit undervaluation and ongoing and forthcoming investment opportunities, global investors stand to reap the benefits from participating in Malaysia’s growth prospects,” he said in his keynote address at the virtual Islamic Finance Symposium 2024, organised by FitchRatings today.
Rasheed added the ringgit has been under pressure since 2022, largely influenced by the aggressive policy rate adjustments by the United States Federal Reserve. This phenomenon is not specific to Malaysia but reflects broader currency market dynamics.
“Given our positive growth prospects, the current ringgit level is undervalued. This is unwarranted, as the ringgit is also supported by sustained investor confidence, evidenced by the stable long-term government bond holdings by non-residents at around 22 per cent, and recent foreign inflows into domestic equities,” he said.
— Bernama
