How will BNM manage ringgit volatility with intervention?

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Bank Negara Malaysia's Approach to Managing Ringgit Volatility

Bank Negara Malaysia (BNM) is prepared to intervene in currency markets to manage ringgit volatility, with any actions taken being measured to ensure orderly market conditions. The central bank's primary mandate remains price stability, which supports sustainable economic growth.
Intervention Preparedness and Strategy

BNM has indicated its readiness to step into the foreign exchange market should the need arise to counter excessive fluctuations in the ringgit's value. The approach to any intervention will be deliberate and calculated, aiming to maintain stability rather than dictate specific exchange rate levels. This measured response is intended to prevent disorderly market movements that could disrupt economic activity.
Broader Economic Tools and Context

Beyond currency intervention, BNM is focusing on a range of economic tools to mitigate the impact of external factors, such as newly imposed US tariffs on Malaysian exports. The Malaysian economy is considered to be entering this period from a position of strength, supported by robust investment, resilient domestic demand, and a diversified base of trade partners. These underlying economic fundamentals are seen as crucial in navigating trade disputes and currency fluctuations.
Monitoring and Economic Outlook

The central bank is actively monitoring the ringgit's performance, which has experienced volatility in line with regional peers. While BNM is reassessing its economic growth forecast for Malaysia, currently projected at 4.5–5.5 per cent for 2024, there is no immediate urgency to revise it as conditions remain fluid. Inflation is expected to remain contained, projected at 2–3.5 per cent for the year, even with adjustments to fuel subsidies. Efforts are also underway to encourage the repatriation of foreign investment income and the timely conversion of export earnings into ringgit, further supporting the currency.

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How will BNM manage ringgit volatility with intervention?

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