Source from (The Malaysian Insider): http://www.themalaysianinsider.com/business/article/zeti-sees-market-volatility-easing/
Published: Jun 14, 2013
“We have strengthened financial intermediaries, developed financial markets to absorb these volatile inflows and outflows without being destabilised,” Zeti told a news conference in Kuala Lumpur.
“Malaysia can better manage and absorb this volatility,” she said.
Malaysia’s ringgit currency slid to 3.1570 against the dollar earlier this week, its weakest since July 2012, tracking falls in other regional currencies and stock markets and sparking speculation of possible central bank intervention.
This morning, the ringgit was firmer, at around 3.12 to the dollar.
Malaysia’s central bank, Bank Negara, has held its key interest rate steady at 3 per cent since May 2011 to spur growth in the trade-reliant economy at a time of weak overseas demand.
Zeti declined to say whether the ringgit’s recent fall made an interest rate hike more likely, saying only that any central bank move would be “orderly”.
Zeti said she saw current market volatility as temporary and that the central bank was committed to maintain calm conditions.
“Our mandate is maintaining orderly foreign exchange market conditions. We do not look to support any specific level of exchange rate,” she said.
Zeti said that a recent decline in Malaysia’s trade surplus had not weakened its ability to cope with fund outflows, pointing to the country’s high level of foreign reserves.
“We have managed to build up reserves of US$140 billion (RM437 billion). This supports our external position,” she said.
Malaysia’s exports unexpectedly fell in April from a year ago, the third straight month of declines, pushing the country’s trade surplus to a 16 year-low. — Reuters
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