Zeti denies circulars to forex dealers to halt taking orders

Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz has denied the central bank has issued circulars to forex dealers from taking orders for transaction from offshore banks to stem ringgit depreciation.

“There is no circular has been issued, we just reinforced the rule that we have in place, this is what we have informed those in the forex exchange market,” she told reporters at the sidelines at the briefing of the Global Findex 2014 Measuring Financial Inclusion around the World on Thursday.

According to a spokeswoman, it has always been the requirement that all foreign exchange transactions are backed by underlying transactions and that banks are reminded that they can decline these orders, which does not meet the requirements.

“Banks can freely conduct foreign exchange transactions throughout the day with onshore banks,” the person said.

Zeti reiterated that the central bank has no planS to peg the Ringgit.

“There is not intention of moving to a less flexible exchange rate regime.

“We have a solid, strong and resilient financial system. We have high level of reserves and that is what reserves are for to represent buffers during this period,” she said.

The ringgit is the worst performing emerging Asian currency this year, and has fallen to 17-year lows.

At midday, the ringgit was quoted at 4.1048 to the US dollar versus the previous close of 4.1058.