KUALA LUMPUR – The ringgit appreciated by 0.9% against the US dollar as of November 9 (since October 1), broadly in line with the trend in other regional currencies, Bank Negara Malaysia (BNM) governor Datuk Nor Shamsiah Mohd Yunus said, reported Bernama.
She said the local note was further supported by an improved domestic outlook amid the economic reopening and higher commodity prices.
“Going forward, as uncertainties regarding global liquidity adjustments and developments surrounding the path of the pandemic remain, financial and foreign exchange markets are expected to be subject to periodic bouts of volatility,” she told a press conference to announce the performance of the country’s third quarter gross domestic product results, today.
Nor Shamsiah said during the period of July to September, the local currency depreciated 0.8% versus the greenback, which largely reflected the broad strengthening of the US dollar following greater clarity from the US Federal Reserve that it would likely begin tapering its asset purchase programme towards the end of the year.
Earlier this month, during its sixth and final Monetary Policy Committee meeting, the central bank retained the Overnight Policy Rate (OPR) at 1.75%, keeping the policy rate unchanged since July 2020.
Economists foresee that the central bank would keep its lending rate at the current level at least until mid-2022.
Meanwhile, BNM said the Malaysian economy declined by 4.5% in the third quarter (2Q of 2021: +16.1%), largely attributable to the strict containment measures, particularly in July, under phase one of the National Recovery Plan (NRP).
“Economic activity subsequently picked up as more states transitioned into phase two with less restrictive containment measures (imposed),” she said.
Nor Shamsiah said the country’s economy is expected to improve following the normalisation of economic activities with domestic economy on track to expand by 3.0% to 4.0%.