FMC: Malaysian Ringgit Stable Amid Declining Exchange Rate Volatility

KUALA LUMPUR, Jan 18 (Bernama) -- The Malaysian ringgit has been stable amidst global uncertainties and developments in the United States as markets anticipate policy details by the incoming Donald Trump administration. The Financial Markets Committee (FMC), which was set up by Malaysia's Central Bank (BNM) in May last year, said the exchange rate volatility declined with average ringgit intraday movement narrowing to around 61 points from an average of 82 points in December last year. The difference between the buying and selling rates had also narrowed noticeably to 20 points in January, reducing the foreign exchange transaction cost, it said in a statement to update the impact of the measures laid by the central bank in December 2016, aimed at enhancing the liquidity of the foreign exchange market. It explained that the ringgit level could further stabilise with continued rebalancing of demand and supply of the local currency and reduced ringgit non-deliverable forward market. For the trade sector, a total US$10.7 billion of foreign exchange transaction in relation to exports and imports of goods with a daily average of US$1.1 billion took place during the Jan 1-16 period this year. The percentage of export proceeds conversion continues to increase. For the economy at large, reduced exchange rate volatility and the narrowing spread between buying and selling rate had lowered the transaction cost of conversion, it said. Meanwhile, continuous engagement with stakeholders particularly the corporations and exporters by BNM has resulted in a decline in the number of queries received on the initiatives and its implementation. Since the announcement of the new measures, 1,500 queries were received, out of which 84 per cent have been responded to while the remaining cases will be resolved soon. For the fund manager hedging framework, two additional fund managers have registered with BNM since the last update, with the total assets under management eligible under the framework increasing to US$9.98 billion (RM44.4 billion). The central bank has also engaged two international financial market associations representing global fund managers and banks to provide clarity on the framework. The statement said BNM would facilitate the registration and participation of their members in the onshore financial market. Meantime, BNM and FMC will continue to monitor the progress and garner feedback from the public on the initiatives and engage all stakeholders to ensure its successful implementation. This is aimed at creating a conducive and orderly financial market environment to facilitate business and economic activities. --BERNAMA