KUALA LUMPUR (May 15): The ringgit is expected to remain supported by Malaysia’s economic outlook and ongoing reforms, according to Bank Negara Malaysia (BNM).
“Looking ahead, while external factors will continue to drive exchange rate movements, Malaysia’s firm economic prospects and sustained reform momentum are expected to provide enduring support to the ringgit,” the central bank said in a statement.
BNM said it will closely monitor global developments and reiterated its commitment towards orderly functioning of the domestic foreign exchange market.
The ringgit has been one of the best performing Asian currencies so far this year, appreciating 3.3% against the US dollar and 2.9% on nominal effective exchange rate basis up until May 13 even as the Iran war drags into its third month with no clear end in sight.
Malaysia has held up relatively better than some of its neighbours in grappling with the spike in fuel prices and supply disruptions wreaking havoc across the global economy. Inflation in Malaysia has picked up but remained benign thanks to a system of subsidies and price control on essential goods.
Still, the government and authorities have rolled out some measures, including a debt relief programme totalling RM5 billion for small and medium businesses affected by the conflict in the Middle East.
Banks have also pledged repayment flexibility, restructuring of financing facilities, and advisory services to prevent loans from turning sour as borrowers deal with cash flow challenges.