Bank Negara to iron out admin processes following latest measures

Bank Negara. AZMAN GHANI / The Star REPORTER: JOSEPH CHIN

KUALA LUMPUR: Bank Negara Malaysia is carrying out engagement sessions to gather feedback from exporters affected by its recent measures to stabilise the ringgit and is making arrangements to smoothen the relevant administrative processes.

“As we navigate to implement measures to make the onshore foreign exchange market more efficient, open and transparent, we highly value exporters’ support in contributing to the stability of the financial market and the overall economy,” the central bank said in a statement.

The Federation of Malaysian Manufacturers and the Malaysian Rubber Glove Manufacturers Association were among the industry players that have requested for Bank Negara to allow exporters to retain up to 50% of export earnings in foreign currency instead of the required 25%.

Bank Negara said policies that it formulated had always been in the best interest of the country.

“In this connection, recent measures to develop the onshore financial market and stabilise the ringgit is aimed at providing a better operating environment for all sectors of the economy and as well as for members of the public who have foreign currency obligations such as for education and loans repayments,” it said. 

Bank Negara pointed out that Malaysia had accumulated a trade surplus of more than RM1 trillion since 2006. 

“Between 2006 and 2010, 28% of the accumulated surplus was converted into ringgit, but this has declined to 1% in the past five years leading to severe imbalances in the onshore forex market. This has contributed to the significant volatility in the ringgit exchange rate, which is affecting the entire economy,” it contended.

“It is not uncommon to assess and realign policies periodically to ensure that the economy is well served. The recent measures to develop the onshore financial market are intended to achieve this objective.”