KUALA LUMPUR: The ringgit rose for first time in almost three weeks after Malaysian economic data beat estimates and the central bank set out plans to boost market liquidity.
The US$/ringgit fell as much as 0.4%, most since March 18, to 4.1565. Pair gained 1% in previous 12 sessions.
The ringgit rose 0.33% against the dollar at 2.13pm to 4.1600. On Wednesday it closed at 4.1711.
Malaysia’s GDP and current-account data are fairly positive, and are helping to support the ringgit, says Divya Devesh, head of Asean and South-Asia FX research at Standard Chartered Bank in Singapore.
Central bank’s measures to support market liquidity and accessibility are also positive.
Although domestic drivers have been supportive, external backdrop is quite negative for EM FX with concerns around further escalation of the trade war.
USD/MYR is expected to be range bound in the short term
Note: Central bank announced steps to boost market liquidity after FTSE Russell said it may drop Malaysian bonds from its index due to market accessibility
Malaysian 1Q GDP +4.5% y/y vs est. +4.3%. Current-account surplus widened to the most in five years. - Bloomberg
Below is the statement issued by Bank Negara on Thursday:
Development Initiatives to Enhance Market Liquidity and Accessibility
Bank Negara Malaysia (BNM) continually undertakes initiatives to broaden and deepen the Malaysian financial market. As part of these ongoing initiatives, BNM actively engages market participants to identify measures to promote a conducive and vibrant market environment that is supportive of domestic economic activities.
In line with this, BNM is pleased to announce further development initiatives aimed at improving market efficiency, accessibility and liquidity in the domestic financial market, whilst preserving an orderly and transparent onshore financial market.
Enhancements to repo market liquidity and flexibility
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