© Reuters. FILE PHOTO: A customer counts his ringgit notes outside an exchange in Singapore’s central business district August 25, 2015. REUTERS/Edgar So
KUALA LUMPUR (Reuters) – Malaysia’s central bank said on Tuesday it will intervene in the foreign exchange market to stabilize the ringgit currency, citing what it called recent “excessive” losses.
The ringgit is trading near a seven-month low and has lost nearly 6% of its value against the US dollar this year, losing more ground than its Southeast Asian peers.
Bank Negara Malaysia said the extent of the ringgit’s depreciation did not reflect economic fundamentals, and that recent volatility was also disproportionately higher than historical moves.
“As per its legal mandate, Bank Negara Malaysia will intervene in the foreign exchange market to stop currency movements deemed excessive,” Adnan Al Zilani, assistant governor of the central bank, said in a statement.
He added that the value of the ringgit would continue to determine the market.
He added that the government’s continued efforts to boost the export-based economy will help ensure that the ringgit better reflects the country’s fundamentals.
The central bank said that clarity on the US Federal Reserve’s interest rate and additional stimulus measures in China – Malaysia’s largest trading partner – may also provide support to the ringgit.
Earlier this month, Malaysia’s Finance Ministry said it would implement structural policies aimed at boosting inflows of foreign money and investment that can support the ringgit.