KUALA LUMPUR (Feb 17): The ringgit is "moving in the right direction", Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour said on Monday, adding that the central bank remains committed to ensuring an orderly market, and preventing excessive volatility that could negatively impact the country's economy.

Speaking in a panel discussion at the China Conference Southeast Asia 2025, organised by the South China Morning Post, Abdul Rasheed said the narrowing interest rate differential with the US should be positive for the ringgit. However, he did not provide a year-end forecast for the local currency, in line with the central bank’s long-standing policy.

“Of course, we have seen volatility in the market since November last year, and we can expect this to continue. But it is still at a very healthy level. Despite the fluctuations, the ringgit strengthened by 2.7% against the US dollar last year, and has risen by about 1% year-to-date,” he said.

At the time of writing on Monday, the ringgit was up 0.01% at 4.4315 against the greenback.

Abdul Rasheed attributed the ringgit's resilience to Malaysia’s strong economic fundamentals, diversified trade partnerships, rising investment flows, and growth in the travel sector. “Given these factors, I believe the outlook for the ringgit remains positive,” he said.

The BNM governor stressed, however, that as a small and open economy, Malaysia remains vulnerable to global developments. While it is too early to gauge the full impact on the economy and financial sector, the effects can be assessed through three key channels: global growth, global inflation, and financial conditions.

Abdul Rasheed said protectionist measures and tariffs could slow global economic expansion. “If global growth declines while inflationary pressures rise, it means the pace of interest rate reductions will likely slow,” he added.

To support the ringgit, BNM is actively engaging with government-linked companies and government-linked investment companies to encourage more consistent repatriation and conversion of their foreign investment income into ringgit, he reiterated.

Additionally, the central bank has intensified efforts to engage with exporters and international investors to promote currency conversions and highlight Malaysia’s investment attractiveness.

“For example, look at our daily turnover — it has increased from about US$15 billion (RM66.48 billion) at the beginning of last year to around US$17 billion now. These are the measures we will continue to pursue,” Abdul Rasheed said.

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