The government will not be introducing further steps to curb the movement of the ringgit as was seen last year.

Second Finance Minister Johari Abdul Ghani in an interview with Bloomberg Television yesterday said there is currently no need to impose further steps to reduce movements in the ringgit as the gap between prices quoted offshore and in domestic markets is now “quite stable”.

“Our measures have worked,” Johari was reported saying in Cebu, Philippines at a gathering of Southeast Asian finance officials.

He stressed Malaysia is “very committed to free flow of capital, we are very committed in terms of not engaging in pegging or currency controls”.

Asked about the possibility of further currency measures, he told Bloomberg, “No need, no need. I think we’re happy at this moment.”

Last year, Bank Negara Malaysia curbed trading in offshore non-deliverable forwards (NDF) to stop speculation on the ringgit

The move, reported Bloomberg earlier, has made it harder for global funds to hedge their exposure.

“While it has successfully reduced ringgit volatility, it is threatening to discourage overseas investors,” wrote Bloomberg in February.

In that report, a Bloomberg survey predicted the ringgit will slide to RM4.53 per US dollar by mid-year.

Last year it was reported the ringgit had fallen to its lowest level against the US dollar since the 1998 Asian financial crisis.

In 1998, the ringgit was temporarily pegged at 3.80 to the dollar to ride out the crisis, before which the ringgit had traded at roughly 2.50 to the dollar.

Optmistic about economy

According to Bloomberg, last year’s Bank Negara move had caused investors to pull out over RM 35 billion from Malaysian sovereign bonds in the four months through February, the longest stretch of outflows since 2014.

However, Johari was confident the growth in exports would help strengthen the ringgit.

Exports in February reportedly surged, owing in part to demand for electrical and electronic products.

“We’re promoting our exports, we’re going into markets that are non-traditional for us,” Johari told Bloomberg.

“If things work where they are today and if our GDP continues to grow, I can only see strengthening of the ringgit.”

The country would be “comfortable” with oil prices at around US$55 a barrel, he added.

– M’kini