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BUSINESS

No need to hoard US Dollar purchases and exacerbate the situation -- BNM Governor

03/10/2022 02:32 PM

By Durratul Ain Ahmad Fuad

KUALA LUMPUR, Oct 3 (Bernama) --  There is no need to hoard or frontload US dollar purchases as while the current depreciation of the ringgit is due to the strength of the US dollar, corporate Malaysia can help in maintaining orderly market conditions by taking actions which do not exacerbate the situation, said Bank Negara Malaysia (BNM) Governor  Tan Sri Nor Shamsiah Mohd Yunus.

She said BNM will ensure that the country’s onshore foreign exchange market remains liquid, so businesses can be assured that all their foreign currency needs can be efficiently fulfilled.

“So there is no need to hoard or frontload US dollar purchases. Corporates and domestic financial institutions should also be prudent in managing their balance sheets.

“This includes avoiding creating new vulnerabilities, especially from foreign currency debt and financial imbalances, as well as hedging their risks appropriately,” she said when giving a speech on “Navigating Malaysia’s Economic Transition in a post-COVID world” at Khazanah Megatrends Forum 2022 today.

She said businesses and investors that benefit from a ringgit depreciation should also take advantage of the weaker ringgit.

For example, according to Nor Shamsiah, for those in tourism and exports to increase production and capitalise on this opportunity, and for those with a global presence, to reinvest back home.

On a broader note, she said, as an open economy, the policy priority for Malaysia is to sustain economic growth within an environment of price stability and to further strengthen economic fundamentals through the necessary reforms.

“This will provide more enduring support for the ringgit rather than resorting to capital controls or re-pegging as some have suggested, which would create more harm to the economy,” said Nor Shamsiah.

At 1.37 pm, the local currency stood at 4.6485/6515 against the greenback from 4.6400/6445 at the opening this morning. 

-- BERNAMA

 


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