ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Economy

Malaysian central bank intervenes to support ringgit

 (placeholder image)
Malaysian ringgit bank notes of different denominations   © Reuters

KUALA LUMPUR -- Malaysia's central bank has asked foreign banks in the country to refrain from trading the ringgit in offshore nondeliverable forwards as the currency continues to weaken.

In a statement on Wednesday, the central bank said it had made a request "through onshore banks that any non-resident banks which transact in the forex market to attest that they are not and will not engage in NDF-related transaction."

Malaysia does not recognize offshore trading of the ringgit, a measure put in place during the Asian financial crisis almost 20 years ago. Yet, the currency is traded rampantly in offshore NDF, or futures, markets as a hedging instrument and the rate quoted tend to veer lower than onshore spot rates.

The directive came after the currency declined sharply last week on expectations of an imminent interest rate hike after Donald Trump won the U.S. presidential election having promised during the campaign to raise infrastructure spending.

The U.S. dollar has risen to 4.39 ringgit on Thursday, up 4.5% from Nov. 8.

The central bank also denied a Reuters report that it asked foreign banks to make a written commitment to cease the trading of NDFs. It had warned in a statement on Sunday that it was taking "measures to reinforce" existing rules to prohibit the trading of ringgit futures.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends April 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media