KUALA LUMPUR, Feb 17 2017 : The Malaysian financial market continued to see improvement following implementation of measures to develop the onshore financial market on Dec 2 last year.
Indicative of this is the volume of trading activities in the foreign exchange (FX) market.
In statement today, Bank Negara Malaysia’s Financial Markets Committee (FMC) said US$37.0 billion in foreign exchange transactions in relation to exports and imports of goods, took place between January – Feb 15, 2017.
“BNM data also indicates an improved balance between exports and imports FX flows, consistent with the trade surplus in the current account.
“For the months of December 2016 and January 2017, since the measures were introduced, exports conversion exceeded imports by US$372.9 million and US$741.3 million respectively,” it said.
The FMC said the onshore FX market continued to register a daily average volume of US$9.1 billion across all types of transactions.
The ringgit currency pair traded at a daily average transaction volume of US$5.2 billion, of which the spot and forward transactions averaged US$2.3 billion daily.
The exchange rate volatility has reduced with the average intraday movement narrowing to around 53 points in January 2017 from an average of 82 points in December last year, the FMC said.
The bond market was also well supported by institutional investors and financial institutions as the primary auctions received strong bid-to-cover ratios of above two times for the last three bond issuances.
“Non-resident holdings of long-term government bonds stood at 29.6 per cent of total outstanding in January 2017, similar to levels of non-resident holdings in January last year.
“The secondary market volume also recorded a sustainable volume of RM3.6 billion daily,” it said.
The FMC said the ringgit continued to remain stable against the US dollar, with movements comparable to other regional and major currencies that are currently influenced by developments in the US financial market and expectations of interest rate hikes by the Federal Reserve in 2017.
The FMC is a committee established by BNM in May 2016 and comprises representatives from the central bank, financial institutions, corporations, financial service providers and other institutions which have prominent role or
participation in the financial markets.
The committee is chaired by BNM Assistant Governor, Adnan Zaylani Mohamad Zahid. – Bernama