KUALA LUMPUR, March 6 — Bank Negara Malaysia (BNM) is increasing engagement efforts and monitoring the conversion of export proceeds into ringgit by exporting companies in its efforts to strengthen the value of the local currency.

The Ministry of Finance (MOF) said the Malaysian central bank has also continued efforts to encourage the use of the local currency for export settlement to reduce dependence on the US dollar.

"BNM also controls overseas investment by government-related companies (GLCs/GLICs) to reduce pressure on the ringgit. This includes encouraging these companies to prioritise domestic investment as well as delaying new overseas investment.

"Foreign investments implemented also need to be managed prudently such as hedging foreign currency exposure and bringing back the proceeds of foreign investments to reduce the pressure on the ringgit," said the ministry in an answer published on the parliament's website today.

The MOF said this in response to a question by Ramkarpal Singh (PH-Bukit Gelugor) regarding the steps taken to strengthen the ringgit.

It added that the risk from sudden movements in the ringgit's exchange rate against the US dollar can also be mitigated through the use of hedging instruments, an emphasis on prudent overseas borrowing and an increased depth of the domestic currency market.

"Finally, in taking a whole of nation approach, Malaysians are also encouraged to travel within the country and buy local goods because it not only saves money but can also improve the country's economic recovery," said the ministry. — Bernama