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‘Current ringgit levels reflect strong fundamentals’

The ringgit is currently at a level that reflects Malaysia's economic fundamentals, says Bank Negara Malaysia governor Muhammad Ibrahim.

He said the ringgit’s current level was not unexpected especially after the first quarter Gross Domestic Product rose a robust 5.6 percent.

“The (ringgit) level will be reflected by the strength of the economy. We let the market finds its own level and it will pretty much depend on demand and supply of dollar-ringgit,” he told reporters after the Kijang Emas Scholarship Award Ceremony for high achievers in Kuala Lumpur today.

He said the ringgit would reflect the fundamentals of the economy, which was presently very strong.

“The level of international reserves also improved to US$97.3 billion, which reflected the liquidity in the market.

“As for the central bank, if we see any short-term inflows, we will try to ensure that our international reserves are sufficient so that when they (foreign investor) go out, the market still has enough liquidity.

“This is not something new, we have done it when there was a strong inflow into our financial market, we accumulate our international reserves to ensure when the foreign investors leave the market, there is enough liquidity,” he added.

Since November 2016 until April 2017, Muhammad said despite the large outflow of funds, the bond market remained quite stable.

“There are a lot of entities that can buy the bonds, so the bond market hardly moves and remains stable. Also, the liquidity in the market comes from the central bank and the banking system,” he added.

- Bernama

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