No peg­ging of the ring­git, says Jo­hari

The Sun (Malaysia) - - SUNBIZ -

KUALA LUMPUR: The Min­istry of Fi­nance yes­ter­day as­sured in­vestors that Malaysia will not peg the ring­git or im­pose cap­i­tal con­trols de­spite the re­cent volatil­ity faced by the ring­git.

Sec­ond Fi­nance Min­is­ter Datuk Jo­hari Ab­dul Ghani said fur­ther de­cline of the ring­git was wors­ened by spec­u­la­tive ac­tiv­i­ties go­ing on off­shore.

“This fol­lows Don­ald Trump’s elec­tion as the US Pres­i­dent and ex­pec­ta­tions of high in­ter­est rates in the US soon, which have led to in­vestors pulling out their funds from Asia,” he told re­porters af­ter the launch of the MIA In­ter­na­tional Ac­coun­tants Con­fer­ence 2016 here yes­ter­day.

Jo­hari also said that Bank Ne­gara Malaysia (BNM) will en­sure an or­derly for­eign ex­change mar­ket in the coun­try.

“As far as Malaysia is con­cerned, our fun­da­men­tals are solid (given) our Gross Do­mes­tic Prod­uct growth for the third quar­ter, eco­nomic ac­tiv­i­ties and in­fra­struc­ture in­vest­ment,” Jo­hari added.

“We will not go for cap­i­tal con­trols or peg­ging as we are an open econ­omy and we will re­main one,” he added.

Com­ment­ing on the higher Malaysian Gov­ern­ment Se­cu­ri­ties (MGS) yields, Jo­hari said Malaysia has sta­ble and long-term in­vestors who have con­fi­dence in the coun­try’s econ­omy and tend to keep in­vest­ing in the lo­cal MGS.

“They are not like spec­u­la­tors or short-term in­vestors ... that’s what we need to main­tain and keep.

“Who­ever thinks that it’s time to exit, BNM will fa­cil­i­tate that. There is no cap­i­tal con­trol, peg­ging is not an op­tion in our coun­try, and we are an open econ­omy.

“No mat­ter how volatile our econ­omy, we will man­age, based on our fun­da­men­tals,” he added.

Malaysia’s 10-year MGS yields have risen 28.6 ba­sis points to 3.94% af­ter the US pres­i­den­tial elec­tion.

On oil prices de­clin­ing to be­low the US$45 (RM194.85) per bar­rel bench­mark used in cal­cu­lat­ing Bud­get 2017, Jo­hari said: “We will stick to that (US$45 per bar­rel bench­mark). If we want to do any changes, we’ll have to wait un­til the first quar­ter of next year.

“Now is a bit early for us to talk,” he added. – Ber­nama

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