Malaysian central bank urges caution amid ringgit volatility

The Bank Negara Malaysia (BNM), the country's central bank, on Friday downplayed the high price volatility in the ringgit exchange market, saying that ringgit should not be priced out of sync with fundamentals.

The ringgit continued its losing streak and moved to 4.2775 per U.S. dollar on Friday afternoon, compared with 4.1885 per U.S. dollar on Nov. 1, according to data from the central bank.

At one point, the ringgit plunged to 4.5280 per dollar, its weakest in more than 12 years in offshore markets, said the state news agency Bernama.

"As the ringgit is a non-internationalized currency, prices should be fully determined by onshore financial market transactions that are driven only by the fundamentals and genuine trade and investment activities in Malaysia", said Assistant Governor of BNM Adnan Zaylani in a statement.

BNM is taking measures to ensure the markets do not price ringgit excessively and out of sync, while providing the necessary liquidity in the foreign exchange market, he added.

Earlier on Friday, when announcing Malaysia's third quarter GDP growth, BNM governor Muhammad Ibrahim said the bank will not peg the ringgit despite the recent volatility the currency has been facing due to the external environment.

The Malaysian economy posted a 4.3 percent growth in the third quarter, a 1.5 percent increase than the second quarter's 4 percent.

Due to price volatility, some commercial banks even set a 1,000 U.S. dollars limit for foreign exchange transactions. Endit