Bank Negara Malaysia is exploring new measures to ensure that the ringgit remains stable, according to the central bank’s deputy governor.
“We are still looking at what are the various other measures which we can undertake, initiatives that we can undertake to ensure that the ringgit remains stable and supported,” Deputy Governor Adnan Zaylani Mohamad Zahid said at a central bank event on Wednesday.
It’s important for the ringgit to “perform like we expect it to perform to reflect the strength of our fundamentals,” he added.
Policymakers have taken coordinated measures to shore up the local currency after it slid to a 26-year-low in February. The efforts have helped stabilized the ringgit since.
The ringgit rose 0.1% against the dollar to 4.7158 on Wednesday.
The central bank will also focus on “domestic challenges” in deciding its monetary policy, given the potential impact from the nation’s fuel subsidy reforms, Adnan Zaylani said.
“Subsidy rationalization presents near-term challenges on how our inflation and growth outlook could be affected in the near term,” he said. “Whether this warrants any response at all from monetary policy is something that has yet to be determined.”
Malaysia started cutting blanket diesel subsidies on Monday and has vowed to make a similar move with RON95, the country’s cheapest and most commonly used gasoline, as the government seeks to improve its finances. – Bloomberg
