He said while the value of the ringgit will continue to remain market-determined, the central bank expects ongoing measures by the government to strengthen the economy would eventually ensure the ringgit reflects the country’s fundamentals.

“The ringgit continues to be affected by global developments, however, Malaysia’s expected economic growth in the range of 4-5%, structural reforms and fiscal consolidation efforts by the government are supporting factors for the ringgit,” said Adnan, who is also the financial markets committee (FMC) chairman.

In today’s FMC meeting, which focused on the current financial market dynamics affecting the ringgit, it was noted that corporations and exporters have accumulated larger balances in foreign currencies.

This observation has prompted concerns regarding possible imbalances in market flows, leading to discussions within the committee, said Adnan.

In managing their forex risks, corporations and exporters should be encouraged to take advantage of the attractive level of exchange rates to optimise their foreign currency balances, he noted.

Meanwhile, Financial Markets Association of Malaysia president Chu Kok Wei said financial markets in Malaysia continue to operate in an orderly manner and remain conducive to carrying out clients’ needs.

“We welcome BNM’s guidance on the ringgit and recent market developments. We will remain supportive of its efforts in domestic markets,” he said.

In addition to Malaysia’s strong economic fundamentals, the FMC is of the opinion that further clarity on the US Federal Reserve’s terminal rate and possible positive signs from China’s stimulus measures may provide support to the ringgit and Asian currencies in general.

A recent forecast by analysts and economists continues to point to broad-based recovery against the US dollar by the end of the year, at an average of 4.56 versus the dollar in the third quarter and 4.50 in the fourth quarter.