I believe the reserves is dwindling - and is not sufficient to prop up the ringgit.
This could account for the ringgit weakness.
ricky l
now
If the Economic growth improve the reserves, then i believe the ringgit will be able to strengthen.
ricky l
1 second ago
The capital outflow due to higher interest rate from US Fed - will have drag the ringgit down - and only stronger reserves can counter the capital outflow.
ricky l
1 second ago
Because if investors sell ringgit to buy US dollar, Central bank can sell US dollar and buy ringgit to maintain the exchange rate that is supportive of Economic Growth.
Also Central Bank can increase interest rate to keep investors invest in ringgit with a stronger reserve - to service the higher interest rate.
Lower ringgit will boost export - but will make import expensive and will contribute to capital outflow.
ricky l
now
Lower ringgit will result in imported inflation - making goods and services more expensive.
Najib confident Bank Negara measures will stabilise ringgit
Najib said that the ringgit's depreciation is caused by excessive offshore speculation, the fall of crude oil prices, and interest rates of the US Federal Reserve. — Reuters pic
PUTRAJAYA, Jan 9 — Prime Minister Datuk Seri Najib Razak today expressed confidence that measures taken by Bank Negara Malaysia will help stabilise the value of the ringgit that has slid against the US dollar.
Speaking to civil servants at the Prime Minister's Department monthly assembly today, Najib said that the ringgit was not an "exception" when it comes to currencies’ depreciating value.
"Out of 149 currencies in the world, 123 have depreciated against the US dollar, so the ringgit is not an exception," he said.
He said that the ringgit's depreciation is caused by excessive offshore speculation, the fall of crude oil prices, and interest rates of the US Federal Reserve.
"But Bank Negara are taking measures which can stabilise the ringgit and would help stop the volatility," he added.
BNM had set out measures to intervene and to control the ringgit's value in the foreign exchange market late last year.
The ringgit, which has been declining since the fall of crude oil prices in late 2014, took a further hit late last year following the victory of Donald Trump in the US presidential elections.
Najib confident Bank Negara measures will stabilise ringgit