The ringgit remains one of the best performing currencies in the region despite depreciating against the US dollar since September last year, the Finance Ministry says.

In a written parliamentary reply on Monday to William Mawan Ikom (BN-Saratok), the Finance Ministry said the value of the ringgit increased by 3.1 percent against the dollar since April.

It has also increased by between zero and 6.8 percent against regional currencies, the Finance Ministry said, without naming the other currencies.

"The increase in the ringgit's value was mainly due to an increase in global oil prices.

"The ringgit's value had also increased due to the fall in the US dollar's value following market reactions to the delay  by the US Federal Reserve in raising interest rates to a more reasonable level," the ministry reply states.

Prior to this, it added, the fall in the ringgit's value against the US dollar since September last year was not an isolated incident and was mostly driven by external factors.

Protecting locals from forex shock

These factors were improvements in the US economic prospects, the possibility of an interest rate hike in the US that was drawing investors and the slump in global oil prices.

From September 2014 until May 13, 2015, the Finance Ministry said, regional currencies, including the ringgit, fell by between one and 11.2 percent against the US dollar.

Mawan asked for the long-term and short-term measures being taken to ensure that the ringgit remained competitive on the foreign exchange.

To that, the Finance Ministry said Malaysia had made efforts to develop and expand the size and instruments in the domestic foreign exchange market, which shelters local traders from exchange rates instabilities.

“The government’s policy aim, through Bank Negara Malaysia, is to ensure an orderly situation in the ringgit foreign exchange market and avoid sudden increases or decreases in the exchange rate.

"This is important, since Malaysia is a very open economy with high levels of international trade and investment."