Malaysia Committed To Free Flow Of Capital
Malaysia will not impose further steps to reduce movements in the ringgit as the country’s economic growth should help strengthen its currency, said Second Finance Minister Johari Abdul Ghani.
Speaking to Bloomberg, he said there was no need for additional tightening measures as the gap between prices quoted offshore and in domestic markets were “quite stable”.
Central bank Bank Negara Malaysia warned foreign banks late last year against using offshore non-deliverable forwards to bet against the ringgit and vowed to limit speculation.
Global funds and investors pulled more than RM35 billion from the country’s sovereign bonds in the four months through February, the longest stretch of outflows since 2014.
“Our measures have worked,” Johari said, adding that there were misconceptions that authorities restricted money flows and reiterated that Malaysia is “very committed to free flow of capital, we are very committed in terms of not engaging in pegging or currency controls.”
Since reaching a record in November, the gap between the onshore ringgit prices and one-month non-deliverable forwards has narrowed.
