00:00 In 2024, the US dollar continued to display strength amid the shifting expectations of
00:06 the US Fed Reserve's monetary policy path and the heightened geopolitical risk.
00:12 These global currency market dynamics have led to pressure on most regional currencies
00:18 including the Ringgit, which has depreciated against the US dollar by 2.4% a year to date,
00:24 as of 15 May.
00:25 To put this into perspective, if you look at the Ringgit's performance as shown in
00:31 the dark red line in the chart, it is actually within the upper range among the regional
00:36 currencies as you can clearly see from the chart here.
00:40 And against this backdrop, the bank's market operations will continue to ensure sufficient
00:46 liquidity and the orderly functioning of the foreign exchange market.
00:51 To manage the short-term pressures on the Ringgit, the government and Bangkok Malaysia
00:56 have taken a number of coordinated actions to encourage consistent flows into the forex
01:01 market.
01:03 And this includes encouraging the repatriation and conversion of foreign investments by GLCs
01:09 and GLEECs, and second, stepping up discussions with corporates and exporters to convert their
01:16 proceeds and overseas investment income in a more consistent and timely manner, which
01:22 we will continue to monitor.
01:26 All these coordinated actions have helped cushion the pressure on the Ringgit despite
01:31 the strength of the US dollar out of late.
01:34 We have seen improvements in the domestic foreign exchange market.
01:39 For example, against the US dollar, the Ringgit depreciated by 1.6% from 26 February to 15
01:47 May.
01:48 And meanwhile, if you look at the Ringgit NER, which actually measures the Ringgit's
01:52 performance against major trading partners, it has depreciated by 2.5%.
01:58 And when compared to regional currencies, the Ringgit has also performed relatively
02:02 well, ranking within the upper range against the US dollar.
02:06 The daily forex trading volume has also increased alongside a narrower bid-ask spread, indicating
02:14 improved liquidity in the domestic forex market.
02:20 And we expect these flows can be sustained over time, given that these investment income
02:25 and export revenue are actually recurring in nature.
02:28 And additionally, another initiative that we are working on is to pilot a fast-track
02:34 pre-approval framework for corporates who bring back foreign currency funds and convert
02:39 them into Ringgit, to enable them to reinvest abroad when the time comes.
02:45 This aims to address frictions raised by corporates during our engagement with them.
02:49 We have responded by giving this flexibility.
02:52 I'm Hee from Sincio Daily.
02:54 Currently, the Ringgit has rebound.
02:56 Will the bank and government take further actions to ensure the Ringgit remains stronger?
03:03 I have a question regarding the non-interest rate measure.
03:07 Do you think this is the best tool to support Ringgit?
03:10 And I can see, although the Ringgit has improved, but it's still hovering around 470 level against
03:18 the greenback.
03:20 So in order for it to rebound further, do you think there's a need to increase the daily
03:28 trading volume?
03:29 I think first, in terms of Ringgit, the pressure on Ringgit has actually come down, especially
03:37 if you look in terms of from when we started our coordinated actions.
03:40 I think you can see from the slides here.
03:43 We started our coordinated actions from 26th of February, and that brought a number of
03:49 positive outcomes.
03:50 What we have done is that, number one, the government of Banggara Malaysia, we, number
03:55 one, encouraged the penetration of conversion of foreign investment income by GLC and GLEECS.
04:02 And we actively engaged the corporates and exporters to convert their export proceeds
04:07 and foreign investment income.
04:10 And we also monitor in terms of the conversion of export proceeds and import payments.
04:15 So all this has actually contributed to strengthening of the Ringgit.
04:19 We look in terms of Ringgit performance against US dollar, depreciated by 1.6%.
04:25 Secondly, in terms of since 26th of February, and in terms of the nominal effective exchange
04:32 rate, that also depreciated by 2.5% since our coordinated action.
04:37 And the forex market trading volume has also increased to about 17.6 billion during that
04:44 period as compared to 15 billion before we started the coordinated action.
04:49 And even the US dollar, Ringgit, with our spread, has also narrowed to about 39% in
04:55 point as compared to before.
04:58 So these are all the positive factors that we are seeing from the coordinated action
05:04 that Banggara undertake with the government.
05:08 In terms of your questions with regard to whether the non-interest rate measure is effective,
05:15 so far it has been effective from what we are doing.
05:17 As I highlighted just now, with regard to the coordinated action that we have undertaken.
05:23 And the interest rate measure is something that may not be appropriate to actually address
05:30 Ringgit issue.
05:32 Because I think, as I mentioned earlier, the monetary policy position of Banggara is that
05:38 in terms of how does he have, in terms of the outlook for growth and also profitability.
05:44 So that's the main focus for interest rate setting, monetary policy and OPR.
05:48 So not so much in terms of Ringgit.
05:52 And you mentioned that Ringgit is still hovering between 468, 470.
05:58 There is actually improvements because if you look in terms of from where we were before
06:03 we started the coordinated action, it was higher.
06:06 And you must also take into consideration that actually the pressure since then has
06:10 been even higher, given the shift in terms of the expectation of the fund rate, that
06:18 it may be higher for longer.
06:21 Despite that shift in sentiment, Ringgit has not depreciated as much.
06:26 And this is so clearly seen if you look at the performance of Ringgit.
06:30 If you look at the regional level, due to date, Ringgit is about the middle, about fourth
06:37 in the region.
06:38 You can see from the slide.
06:41 And if you look from February that we started the coordinated action, Ringgit has been the
06:46 best performer as compared to the other regional currencies.
06:49 So this is the impact in terms of what we have seen from the coordinated action undertaken
06:54 by both government and Banggara.
06:56 [END]
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