KUALA LUMPUR (June 24): Malaysia will step up efforts to attract foreign exchange flows following the ringgit’s recent correction, even as the currency remains supported by the country’s solid economy.

Ongoing measures to encourage inflows like the Qualified Resident Investor programme, as well as engagements with government companies and corporates to repatriate and convert their income, will be intensified, according to Bank Negara Malaysia’s (BNM) Financial Markets Committee.

“Looking ahead, external developments, as well as domestic factors, are expected to continue driving the ringgit's performance, but Malaysia’s solid economic profile will help to provide enduring support to the ringgit,” the committee said in a statement.

The ringgit has lost over 4% against the US dollar in June after bucking the decline of most Asian currencies throughout the Iran war. The ringgit was also hit by MSCI’s May review that saw the removal of six Malaysian stocks from the index widely tracked by international investors.

Rising expectations of higher US interest rates are now propping up the greenback while domestic political risks are now weighing on the ringgit with Johor and Negeri Sembilan holding elections in the coming weeks.

Still, foreign investors appear to be taking a “neutral stance in their portfolio positioning”, ahead of the state elections, the BNM committee said.

The onshore currency market remains “healthy” with average daily turnover rising to US$21.3 billion this year from US$19.8 billion in 2025, driven by “balanced” two-way flows, the committee said, noting that corporate foreign exchange activities remain “consistent with general expectations”.

The committee, set up in 2016 to broaden industry engagement, is currently led by BNM deputy governor Adnan Zaylani Mohamad Zahid and includes representatives from financial institutions, corporations, financial service providers and other institutions.