Malaysia’s central bank said it’s ready to manage excessive moves in the ringgit and expects inflows by state-linked firms and the country’s economic prospects to buoy the currency in the longer term.
The ringgit has relinquished almost all of its gains from January after President Donald Trump rattled global markets with a series of trade levies.
"BNM remains vigilant and stands ready to provide liquidity as needed,” Bank Negara Malaysia said in an emailed response on Wednesday to questions from Bloomberg News.
"Beyond short-term currency dynamics, Malaysia’s strong fundamentals, positive economic prospects, and domestic structural reforms will continue to provide enduring support to the ringgit.”
While currency volatility has picked up with the tariff measures and trade uncertainty, the impact remains highly uncertain, with developments very fluid, BNM said.
Coordinated measures by the government and central bank to encourage flows along with narrowing interest rate differentials between Malaysia and advanced economies going into 2026 could be positive for the ringgit, the central bank said.
Bank Negara has been encouraging state-linked firms and investment funds to repatriate foreign investment income and convert it into the local currency to buoy the ringgit after it slid to a 26-year low in February 2024.
The currency was the top performer across emerging markets last year. The government’s efforts to boost investments in the semiconductor industry and data centers contributed to the nation’s economic resurgence and attracted foreign investments. - Bloomberg
