KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) has urged its members to take heed of Bank Negara Malaysia's (BNM) call for businesses to be part of the whole-of-nation approach needed to ensure the stability of the ringgit.
President Tan Sri Soh Thian Lai said in a statement the association supports the initiatives undertaken by the central bank to manage the short-term pressure on the ringgit, including their call for support from corporates and investors to ensure more inflows into the foreign exchange (FX) markets.
He highlighted that during an engagement session with chambers of commerce, business councils, trade associations and chief executive officers of Malaysian companies last Friday, BNM urged business communities to take action.
Soh said BNM has stressed key actions focusing on the 'Malaysia First' attitude, calling the business to prioritise and realise investment opportunities domestically, and choose domestic goods, services, and recreation.
FMM also implored corporate entities to manage investment activities that minimise outflows by deferring any new investment abroad, repatriating and converting realised investment income earned abroad in a more timely and consistent manner, and hedging any new and large investments abroad.
BNM has also called on them to prudently manage trade activities by utilising local currency settlement facilities to minimise dependency on the US dollar for trade settlement purposes and refrain from holding back conversion and front-loading import payments beyond what is required for business needs.
"It is hoped that the collective action by BNM to ensure sufficient liquidity in the domestic FX market and dynamic management of monetary operations and the support from the business community, the ringgit will strengthen in the coming months," he said.
Soh noted that BNM Governor Datuk Abdul Rasheed Abdul Ghaffour had said that the decline in the value of the ringgit is temporary and due to external factors and that looking ahead, the financial markets expect the local unit to appreciate further as the effects of global external factors subside.--BERNAMA