Zeti: Ringgit in for period of greater volatility

PETALING JAYA: The ringgit may experience greater volatility in the coming months, especially with a lot of uncertainties in the international financial system, said Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz yesterday.

Source from (Bernama): http://www.bernama.com/bernama/v7/bu/newsbusiness.php?id=965261
Published: July 23, 2013

Source from (The Star Online): http://www.thestar.com.my/Business/Business-News/2013/07/23/Ringgit-may-experience-greater-volatility.aspx
Published: July 23, 2013

Source from (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/zring/Article/index_html
Published: July 23, 2013


A file picture shows a trader counting Malaysian ringgit and US dollars.

"There is a lot of uncertainty in the international financial system. There will be some gradual re-pricing of risk. As a result, we are in for a period of greater volatility," she said when commenting on the outlook for the ringgit.

At times, she said, the country would see inflows and at other times, there would be reversals and this would precipitate greater volatility in all the financial markets, and not unique to Malaysia.

"What's important is that while there may be immediate reactions to developments that have taken place, any of this re-pricing by investors should in the end be aligned to fundamentals. I believe that there will be a convergence towards pricing according to fundamentals.

"What's important in the transition to that is that countries and financial systems are able to absorb the volatility. This is something that's beyond our control. It's taking place in the international financial system," Zeti said.

To absorb this increased volatility, she said the country needs to continue increasing capacity and capability as what have been done for many years, including building up resilience in financial intermediaries and developing the country's financial markets.

Monitoring and surveillance, and collaboration and cooperation with other countries in this region are also important as these contribute towards maintaining greater stability in the region, Zeti said.

Zeti was speaking after launching the second edition of "Islamic Finance: The New Regulatory Challenge" book here.

Meanwhile, on the central bank's initiative to curb financing and lending of non-banks, she said access to financing were provided to households, small- and medium-scale enterprises and large corporations.

"If they have the capability, they should have access to financing. We aim to provide access to financing to all credit-worthy borrowers.

"However, if they reach a point where they have indulged in excesses, this will only contribute to hardship on themselves, their business and their families," she said.

Zeti also said efforts to strengthen cross-border regulatory and supervisory cooperation arrangements are priorities as Islamic finance becomes more internationalised. Bernama