INTERVENTION in the foreign exchange (forex) market is a routine matter for Bank Negara Malaysia (BNM) which monitors capital inflows and outflows, said Economy Minister Rafizi Ramli. 

According to him, there is a need for BNM to monitor 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 today. 

BNM assistant governor Adnan Zaylani, who is also the Financial Markets Committee (FMC) chairman, said in a statement yesterday that BNM would intervene 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 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% in May 2023, Rafizi said this was the lowest level since last September’s inflation downtrend at 4.5%.   

“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 domestic and international macroeconomic situations.  

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

Inflation growth was curbed by slower growth in some groups such as food and non-alcoholic beverages (5.9% in May versus 6.3% in April 2023), transport (1% versus 2.3% in April 2023) and furnishings, household equipment, and routine household maintenance (2.7% versus 3% in April 2023). – Bernama, June 28, 2023.