Ringgit Is Facing High Volatility – BNM

Bank Negara Malaysia (BNM) has warned that the ringgit will continue to be exposed to the growing period of volatility or volatility due to the ongoing Covid-19 uncertainties amidst the momentum of the global economic recovery and the faster expectation of policy normalisation in the US.

In a statement released on its website, BNM said that between 1 July and 9 August, the ringgit had depreciated by 1.7% against the US dollar, in line with the performance of most other regional currencies, driven by the broad strengthening US dollar.

Commenting on the strengthening of the 0.1% ringgit against the dollar in the second quarter of 2021, BNM said it was largely driven by the dollar's weakness due to the decline in US bond yields and the investor's transition to higher yielding assets.

“However, the expectation of policy normalisation following the FOMC meeting in June has prompted investors to rebalance their portfolio against assets in the US dollar at the end of the third quarter,” BNM explained.