KUALA LUMPUR, March 6 — Bank Negara Malaysia (BNM) is increasing engagement efforts and monitoring the conversion of export proceeds into ringgit by exporting companies in its efforts to strengthen the the local currency’s value.
The Finance Ministry (MOF) said the central bank has also continued efforts to encourage the use of the local currency for export settlement so as to reduce dependence on the US dollar.
“BNM also controls overseas investment by government-related companies (GLCs/GLICs) to reduce pressure on the ringgit. This includes encouraging these companies to prioritise domestic investment and delaying new overseas investment.
“Foreign investments implemented also need to be managed prudently, like hedging foreign currency exposure and bringing back the proceeds of foreign investments to reduce pressure on the ringgit,” it said in an answer published on the Parliament’s website today.
The MOF was responding to Bukit Gelugor MP Ramkarpal Singh’s query on the steps taken to strengthen the ringgit.
It added the risk from sudden movements in the ringgit’s exchange rate against the US dollar, which can also be mitigated by using hedging instruments, an emphasis on prudent overseas borrowing, and an increased depth of the domestic currency market.
“Finally, in taking a whole-of-nation approach, Malaysians are also encouraged to travel within the country and buy local goods because it not only saves money but can also improve the country’s economic recovery,” MOF said.
— Bernama
