“The world is indeed full of peril and in it there are many dark places..."
Bank Negara Malaysia announced yesterday that the exchange rate of the ringgit with immediate effect will be allowed to operate in a managed float, with its value being determined by economic fundamentals. Bank Negara will monitor the exchange rate against a currency basket to ensure that the exchange rate remains close to its fair value. Promoting stability of the exchange rate continues to be a primary objective of policy.
This announcement represents a change in the system by which the value of the ringgit is determined. Given that the current valuation of the ringgit is consistent with our fundamentals and after taking into consideration developments in our trading partner countries, the exchange rate after shifting to this new system is not expected to deviate significantly from the current prevailing level.
Surely, a coincidence when China also announced its decision to un-peg?
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