Malaysia says it won’t peg currency and will focus on policies to strengthen ringgit

Malaysia’s Finance Ministry declared that it is about to enforce constructive rules for encouraging fund inflows and foreign investment that can support the ringgit, reiterating that it has no ideas to peg the currency to the US dollar. The ringgit has fallen 5.4 per cent so far in 2023, and on Tuesday was trading at 4.638 to the dollar, a fresh seven-month low and close to its lower levels since January 1998. In 1998, during the Asian financial destruction, Malaysia enforced capital controls and pegged the ringgit at 3.8 to the US dollar, balancing the peg until 2005. Malaysia’s central bank, Bank Negara Malaysia (BNM), out of the blue enhanced its benchmark interest rate in the month of May, recognizing requirement to manage consistent increase amid robust domestic requirement.