KUALA LUMPUR - Malaysia’s central bank said on Tuesday that it will intervene in the foreign exchange market to stabilise the ringgit currency, citing what it called “excessive” recent losses.

The ringgit is trading near a seven-month low and has lost close to 6 per cent of its value against the US dollar in 2023, declining more than its peers in South-east Asia. The Malaysian currency is down about 5 per cent against the Singapore dollar in the year to date.

Bank Negara Malaysia said the extent of the ringgit’s depreciation was not reflective of economic fundamentals, and that recent volatility was also disproportionately higher than historic movements.

“As per its statutory mandate, Bank Negara Malaysia will intervene in the foreign exchange market to stem currency movements that are deemed excessive,” the central bank’s Assistant Governor Adnan Zaylani said in a statement.

The value of the ringgit will continue to remain market-determined, he added.

Ongoing government efforts to strengthen the export-driven economy will help to ensure that the ringgit better reflects the country’s fundamentals, he added.

Clarity on the US Federal Reserve’s interest rate and additional stimulus measures in China – Malaysia’s biggest trading partner – may also provide support to the ringgit, the central bank said.

Earlier in June, Malaysia’s finance ministry said it would implement structural policies aimed at boosting fund inflows and foreign investment that can support the ringgit. REUTERS