Rafizi: Bank Negara’s intervention in forex market not out of the ordinary 

PUTRAJAYA, June 28 — Intervention in the foreign exchange (forex) market is a normal and routine matter for Bank Negara Malaysia (BNM), which continuously monitors capital inflows and outflows, said Economy Minister Rafizi Ramli.

According to him, there is a need for BNM to monitor the currency rate movements amid certain situations, especially those involving a large amount of ringgit.

“An example is when an export firm exports goods and receives the payments in dollar, so the currency being retained in Malaysia is not in ringgit. If the (foreign currency) amount is large and the situation persists, it will obviously have an impact on the ringgit.

“That is the context for BNM (intervention) for our detailed knowledge of factors other than global ones that influence currency values,” he told a media conference here today when commenting on BNM’s recent statement on its intervention in the forex market.

BNM assistant governor Adnan Zaylani, who is also the Financial Markets Committee (FMC) chairman, said in a statement yesterday that BNM would intervene in the forex market to stem currency movements that were deemed excessive.

“While the value of the ringgit will continue to remain market-determined, BNM expects that ongoing measures by the government to further strengthen the economy will help ensure that the ringgit better reflects the country’s fundamentals,” he said.

The FMC said the extent of the recent depreciation of the ringgit was not reflective of the country’s economic fundamentals

On the moderation of inflation rate to 2.8 per cent in May 2023, Rafizi said this was the lowest level since the inflation downtrend that began in September 2022 at 4.5 per cent.

“The lower May 2023 inflation signals a broad decline across all spending categories, marking a comprehensive price stabilisation,” he said.

Rafizi expressed optimism that the inflation rate downtrend would continue based on forecasts and data as well as the domestic and international macroeconomic situations.

On June 23, the Statistics Department announced that Consumer Price Index eased further to 2.8 per cent in May 2023 from 3.3 per cent in the previous month.

Inflation growth was curbed by the slower growth in some groups such as food and non-alcoholic beverages (5.9 per cent in May versus 6.3 per cent in April 2023), transport (1.0 per cent versus 2.3 per cent in April 2023) and furnishings, household equipment and routine household maintenance (2.7 per cent versus 3.0 per cent in April 2023). — Bernama