Malaysia’s central bank today said the ringgit should not be priced out of sync with fundamentals, and that it has a responsibility to tell banks to take temporary measures to calm the market, as the currency weakened sharply in offshore trade.

The ringgit dropped 3.5 percent in offshore non-deliverable forwards from the previous close, while the onshore spot rate barely moved in thin domestic markets.

The ringgit’s one-month non-deliverable forwards (NDFs) plunged to 4.5280 per US dollar, while spot ringgit stood at 4.2670.

“We don’t want to be dictated by factors that have nothing to do with the country’s fundamentals,” central bank governor Muhammad Ibrahim told reporters.

He said the situation now is a result of speculative positioning and that ringgit levels must be supported by underlying transactions on a daily basis.

- Reuters