Key facts
- Malaysia's central bank will increase efforts to support the ringgit.
- Measures include attracting foreign funds and encouraging repatriation of overseas earnings.
- The ringgit has declined over 4% in June.
- The currency's weakness is linked to cautious foreign investor positioning and expectations of higher U.S. interest rates.
- Despite recent declines, the ringgit remains one of the best-performing currencies in emerging Asia year-to-date.
Malaysia's central bank announced on Wednesday it will intensify measures to support the ringgit, which has seen a significant decline in June. These efforts include attracting foreign investment and encouraging domestic companies to repatriate their earnings held abroad.
The Financial Markets Committee (FMC) of Bank Negara Malaysia reviewed the ringgit's more than 4% drop in June, attributing the weakness to cautious positioning by foreign investors and anticipation of higher interest rates in the United States. Despite the recent downturn, the committee noted that Malaysia's economic fundamentals remain strong and the foreign exchange market is functioning smoothly.