9th June 2023 - 2 min read
Bank Negara Malaysia (BNM) assistant governor Adnan Zaylani Mohamad Zahid has dismissed concerns that the local currency will hit RM5 against the US dollar, calling the possibility an unrealistic one. This is because Malaysia is not currently experiencing any form of crisis, he said.
“We don’t really see us heading anywhere in the direction of hitting RM5. These are just levels that we have in our head that we think that something bad is happening. Previously, when we went through ringgit levels from RM2.50 to RM3, then RM4, it is important to note that at that time we were in a crisis. But at the moment, we are definitely not in a crisis. So there is not a reason to be hung up over the dollar-ringgit level,” said Adnan Zaylani.
While Adnan Zaylani acknowledged that the Malaysian ringgit will see some fluctuation against the US dollar because it is – at the end of the day – still driven by global developments, he is confident that BNM is capable of managing these fluctuations, and reassured that the situation is under control. He also noted that some factors that are currently affecting the Malaysian ringgit include the weak global growth outlook, the negative sentiment among investors due to recent banking and debt ceiling crises in the US, as well as weaknesses in the Chinese economy.
“Maybe we will hit RM4 if we could turn [the situation] around quickly. We can go there,” the assistant governor further said, adding that markets in general have been resilient thus far and are operating as usual. He stressed that there are no signs of irregular trends to raise concerns.
In particular, Adnan Zaylani noted that the local financial market remains stable because most of Malaysia’s investors are confined to official institutions, pension funds, insurance companies, and asset management companies. “Most of them are managing their portfolios against global bond indices. Therefore, it is important for the country to continue some policymaking and carry out some necessary reforms so that our bonds remain attractive to foreign investors,” he commented.
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