BNM: Ringgit fell against most world currencies in third quarter

A general view of Bank Negara Malaysia in Kuala Lumpur August 12, 2016. — Picture by Yusof Mat Isa
A general view of Bank Negara Malaysia in Kuala Lumpur August 12, 2016. — Picture by Yusof Mat Isa

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KUALA LUMPUR, Nov 11 — The ringgit lost value against nearly all major currencies in previous quarter, Bank Negara Malaysia said today.

BNM Governor Datuk Muhammad Ibrahim said the ringgit depreciated by 3 per cent against the US dollar, 3.9 per cent against the euro, 5.5 per cent against Australian dollar, and 4.2 per cent against Japanese yen in the period.

“The ringgit also depreciated against all regional currencies except the Philippine peso, by between 1.8 per cent to 7.3 per cent,” he told a press conference announcing Malaysia’s third quarter economic results for 2016.

But he insisted that there were no plans to introduce a peg to the ringgit’s value despite the wholesale decline.

The depreciation was a result of external factors and a “reflection of a shift in investor sentiments”, he added.

The ringgit fell almost 5 per cent this morning, as investor expectations of an interest rate hike in the US led to the decline of bonds by most emerging Asian nations such as Malaysia.

“While all regional currencies were affected by the continued uncertainty over the timing of US interest rates normalisation, the ringgit and the currencies of other commodity exporting countries were faced with additional adjustments due to the highly volatile global crude oil prices,” he said.

Muhammad also stressed that ringgit’s value should not be valued by speculation, but instead through exchange prices set by banks.

“But what we can do is, Bank Negara can step in and say that we are still around, and advise the banks not to set a price that is very different from the fundamentals,” he said.

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