BNM Governor: Malaysia’s US Watch List Exit Strengthens Ringgit’s Market-Driven Status

Bank Negara Malaysia (BNM) welcomed Malaysia’s removal from the US currency manipulation watch list, affirming that the ringgit is driven by market fundamentals. Governor Datuk Seri Abdul Rasheed Ghaffour emphasized that Malaysia does not use its exchange rate to gain a competitive advantage, marking the development as a positive step for the country’s economic policies.

Malaysia’s Ringgit Performance Surge

The ringgit appreciated by 14.9% against the US dollar in Q3 2024 and 3.1% year-to-date as of Nov 13. This rise was influenced by the US Federal Reserve’s policy easing and Malaysia’s efforts to encourage businesses to repatriate export earnings and convert income into ringgit. This strategy has led to increased forex turnover, rising from US$15 billion to US$18.2 billion year-to-date.

Governor Abdul Rasheed remains optimistic about the ringgit’s future, expecting further appreciation due to strong domestic growth, government reforms, and narrowing interest rate differentials between the US and Malaysia. Despite potential volatility from a US presidential change, Malaysia has historically recovered quickly, and the governor is confident that the ringgit will continue to strengthen.

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