Malaysia to ramp up support for ringgit as foreign outflows, Fed rate outlook weigh

ReutersWed, June 24, 2026 at 2:54 AM UTC

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A Malaysia Ringgit note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration

June 24 (Reuters) - Malaysia's central bank said on Wednesday it would step up efforts to support the ringgit, ‌including measures to attract foreign funds and encourage state-linked ‌firms and companies to repatriate overseas earnings.

Bank Negara Malaysia said its Financial Markets ​Committee, which met to review the ringgit's more than 4% decline so far in June, noted that the country's economic fundamentals remain strong and that the onshore foreign exchange market continues to ‌function smoothly.

Here are some ⁠details from the meeting:

• The central bank said that recent weakness in the currency was due ⁠to cautious positioning by foreign investors and growing expectations of higher interest rates in the United States, days after the ringgit ​hit a ​seven-month low.

• The FMC said ​global financial markets remained focused ‌on rising prospects of higher U.S. policy rates as elevated inflationary risks weigh.

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• The FMC noted foreign investor outflows but said they largely reflected portfolio adjustments following the ringgit's strong performance earlier in the year.

• The ringgit, despite a 4.5% decline ‌in June, remains only 2% in ​red for the year, making it ​one of the best-performing ​currencies in emerging Asia.

• "NR (non-resident) investors are seen to ‌be taking a neutral stance in ​their portfolio positioning," ​the committee said.

• "Looking ahead, external developments, as well as domestic factors, are expected to continue driving the ringgit performance, ​but Malaysia's solid ‌economic profile will help to provide enduring support to ​the ringgit."

(Reporting by Shivangi Lahiri and Sameer Manekar in ​Bengaluru; Editing by Sherry Jacob-Phillips)

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Source: “AOL Money”