Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul said that the government will leave it to Bank Negara to decide whether to force exporters to convert their export earnings into ringgit.
He pointed out at the press conference after attending the 2023 International Electric Vehicle Exhibition promotion ceremony today that Bank Negara’s move is a capital control method to control the interest rate difference between the ringgit and foreign currencies, which has its advantages and disadvantages.
“If we look at the interest rate differential (3% for the overnight official rate and 5.25% for the US fed funds rate), it is quite large, with the US dollar rate even higher than the ringgit rate.”
“This is the right of Bank Negara, we will leave it to Bank Negara to decide how to control this (problem).”
Since December 2016, the National Bank has stipulated that exporters can only keep 25% of their export income (stored in foreign currency), and the remaining 75% must be converted into ringgit and deposited in local banks.
On the other hand, Zafrul called on local businesses, especially government-linked corporations (GLCs), to play a role in supporting the ringgit’s movement, rather than just laying the blame on the government.
“This is very important, we must have confidence in the performance of our own currency, especially Malaysian companies and government enterprises that are engaged in exporting.”
He said that as a net exporter, the current account status should reflect a positive effect on the currency, but the market should also remain positive for the currency.
After the release of the U.S. non-farm payrolls data, the ringgit opened at 4.662 against the U.S. dollar, up 0.12% from the closing price of 4.668 on Friday (7th), and fell slightly by 0.04% to 4.67 at the close of the market.
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