Source : The Borneo Post / BERNAMA

Posted on October 10, 2013, Thursday

KUALA LUMPUR: The government will continue to ensure an orderly condition for the ringgit foreign exchange market to enable adjustment in the real economy.

Deputy Finance Minister DatukAhmad Maslan said for the long term interest, priority should be given to achieving an equilibrium between exchange rate flexibility and stability.

“Exchange rate flexibility under the managed float system enables the ringgit to play its role as shock absorber and price indicator,” he said in his speech at the Relaunch of Malaysian Association of Corporate Treasurers (MACT) ceremony here yesterday.

He said the value of the ringgit was deterrnined by market forces and the government does not have any specif ic target level or range for the exchange rate.

“What is important is the formation of a buff er and structural improvements in the economy and financial markets since the Asian financial crisis 1997/98 had put regional economies, including Malaysia, in a situation in which they are more prepared to manage the risk in f inancial market volatility compared with a decade ago,” he said.

Ahmad said the domestic demand that remained strong also provided the buffer to external uncertainties.444424E

In addition, the country’s economy is now more balanced than in 2000, with strong economic fundamentals and diversif ied sources of growth.

“Domestic demand particularly has become a key driver of growth and the services sector plays a more major role. The country’s unemployment level also remains low at 3.0 per cent,” he said.
The f inancial system is now stronger and more advanced than

Ahmad said Malaysia’s banking system which remained resilient as well as its deep and diversified domestic bond market had also created a good intermediation of funds.— Bernama