ON­SHORE FOREX MAR­KET SHOWS IM­PROVE­MENTS

Transactions vol­ume in­creased to a daily av­er­age of US$8.8b in Fe­bru­ary

New Straits Times - - Business - FARAH ADILLA PE­TAL­ING JAYA farah.adilla@me­di­aprima.com.my

THE coun­try’s for­eign ex­change (forex) mar­ket has shown im­prove­ments since Bank Ne­gara Malaysia in­tro­duced new mea­sures to in­crease de­mand for the ring­git and re­duce its volatil­ity against the US dol­lar.

Bank Ne­gara for­eign ex­change ad­min­is­tra­tion depart­ment deputy di­rec­tor Makhzani Mustaffa Ng said there had been in­creas­ing ac­tiv­i­ties in on­shore forex mar­ket since the im­ple­men­ta­tion.

He said the on­shore forex transactions vol­ume had in­creased to a daily av­er­age of US$8.8 bil­lion (RM39.25 bil­lion) last month from US$7.8 bil­lion in Novem­ber last year.

Be­sides, Makhzani said the ex­change rate volatil­ity had de­clined and hence, re­duced forex trans­ac­tion cost.

He said av­er­age in­tra­day move­ment had nar­rowed to 52 points last month, from 228 points in Novem­ber last year.

“(Since the im­ple­men­ta­tion) we have seen our forex vol­ume going up by US$1 bil­lion on av­er­age daily. The in­tra-day move­ment of the forex, on the other hand, has been quoted to 20 points, from 18 points pre­vi­ously.

“The forex mar­ket has also recorded a pos­i­tive net trade con­ver­sion for the first time in the last two years,” said Makhzani dur­ing his pre­sen­ta­tion at Bank Ne­gara’s Ad­di­tional Guide­lines for Ex­porters Fo­rum, here, yes­ter­day.

In De­cem­ber last year, the cen­tral bank an­nounced that ex­porters could only re­tain up to 25 per cent of ex­port pro­ceeds in for­eign cur­rency, while the re­main­der must be con­verted into ring­git.

The new mea­sures were to boost liq­uid­ity and en­cour­age more do­mes­tic trade of the ring­git, as Bank Ne­gara looked to stem the ring­git’s slide against a surg­ing dol­lar.

The fo­rum, or­gan­ised by the Malaysian Palm Oil Coun­cil (MPOC), is to in­form the palm oil in­dus­try play­ers on the lat­est re­quire­ments im­ple­mented by Bank Ne­gara and its im­pact on the in­dus­try.

“This fo­rum is a timely re­minder to the palm oil in­dus­try to help gain bet­ter un­der­stand­ing of the new reg­u­la­tion, es­pe­cially for ex­porters,” said MPOC chief ex­ec­u­tive of­fi­cer Dr Kalyana Sun­dram.

Dr Kalyana Sun­dram

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