The ringgit may experience greater volatily in the coming months especially with a lot of uncertainties in the international financial system, said Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz.
“There is a lot of uncertainty in the international financial system. There will be some gradual re-pricing of risk. As a result, we’re in for a period of greater volatility,” she said when commenting on the outlook for the ringgit.
At times, she said the country would see inflows and at other times there would be reversals and this would precipitate greater volatility in all the financial markets, and this was not unique to Malaysia.
”What’s important is that while this may be immediate reactions to developments that have taken place, any of this re-pricing by investors should in the end be aligned to fundamentals. I believe there will be a convergence towards pricing according to fundamentals.
”What’s important in the transition to that is that countries and financial systems are able to absorb the volatility. This is something that’s beyond our control. It’s taking place in the international financial system,” said the central bank governor.
To absorb this increased volatility, Zeti said the country needed to continue increasing capacity and capability as what have been done for many years, including building up resilience in financial intermediaries and develop the country’s financial markets.
Apart from that, monitoring and surveillance, and collaboration and cooperation with other countries in this region were also important as these contributed towards maintaining greater stability in the region.
Zeti was speaking to reporters after the launching of the second edition of ‘Islamic Finance The New Regulatory Challenge’ book here yesterday.
Meanwhile, on the central bank’s initiative to curb financing and lending of non-banks, she said access to financing were provided to household, small and medium scale enterprises and even the large corporations. “If they have the capability, they should have access to financing. We aim to provide access to financing to all credit-worthy borrowers. “However, if they reach a point where they have indulge in excesses, this will only contribute to hardship to themselves, their business, their families,” she said.