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Statement by Financial Markets Committee: Updates on Malaysian Financial Market

Ref No : 02/17/05 17 Feb 2017 Embargo : For immediate release    

The ringgit continues to remain stable against the US dollar, with movements comparable to other regional and major currencies that are currently influenced by developments in the US financial market and expectations of interest rate hikes by the Federal Reserve in 2017.

The onshore foreign exchange (FX) market continues to register a daily average volume of USD9.1 billion across all types of FX transactions. The MYR currency pair traded at a daily average transaction volume of USD5.2 billion, of which the spot and forward transactions averaged USD2.3 billion daily. The exchange rate volatility has reduced with the average intraday movement narrowing to around 53 points in January 2017 from an average of 82 points in December last year.

The bond market is well supported by institutional investors and financial institutions as the primary auctions received strong bid-to-cover ratios of above 2 times for the last three bond issuances. Non-resident holdings of long-term government bonds stood at 29.6% of total outstanding in January 2017, similar to levels of non-resident holdings in January last year. The secondary market volume also recorded a sustainable volume of RM3.6 billion daily.

Since the implementation of the 2 December 2016 measures to develop the onshore financial market, the FMC continues to see improvement as indicated by the volume of trading activities in the FX market. A total of USD37.0 billion of foreign exchange transactions in relation to exports and imports of goods took place for the period January – 15 February 2017. BNM data also indicates an improved balance between exports and imports foreign exchange flows, consistent with the trade surplus in the current account. For the months of December 2016 and January 2017, since the measures were introduced, exports conversion exceeded imports by USD372.9 million and USD741.3 million respectively.

BNM and FMC will continue to monitor the progress and the feedback from the public on the initiatives and engage all stakeholders to ensure successful implementation of the initiatives, while creating a conducive and orderly financial market environment to facilitate business activities in support of the economy.

Financial Markets Committee
17 February 2017

About Financial Markets Committee (FMC)
The FMC is a committee established by BNM in May 2016 and comprises representatives from Bank Negara Malaysia, financial institutions, corporations, financial service providers and other institutions which have prominent role or participation in the financial markets. The Chair of the FMC is BNM Assistant Governor Adnan Zaylani.

The objective of FMC is to broaden the industry engagement with a focus in reviewing and formulating comprehensive strategies for the wholesale financial markets to meet the diverse and complex demands of a more developed and internationally integrated economy. For more information on the FMC, please refer to the following link: http://www.bnm.gov.my/index.php?ch=en_fxmm_mo&pg=en_fxmm_fmc&ac=451&lang=en

 

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