(File pix) The volume of trading activity in the foreign exchange market has improved since the central bank implemented measures last Dec to develop the onshore financial market.

KUALA LUMPUR: The volume of trading activity in the foreign exchange market has improved since the central bank implemented measures last Dec to develop the onshore financial market.

A total of US$37.0 billion in foreign exchange transactions, in relation to exports and imports of goods, occurred between Jan and Feb 15, said the Financial Markets Committee (FMC).

Bank Negara Malaysia (BNM) data also indicates an improved balance between exports and imports foreign exchange flows, consistent with the trade surplus in the current account.

For the months of Dec 2016 and Jan 2017, exports conversion exceeded imports by US$372.9 million and US$741.3 million, respectively.

"The ringgit continues to remain stable against the US dollar, with movements comparable to other regional and major currencies that are currently influenced by developments in the US financial market and expectations of interest rate hikes by the Federal Reserve in 2017," it further noted.

The FMC, which is chaired by BNM assistant governor Adnan Zaylani, comprises representatives from the central bank, financial institutions, corporations, financial service providers and other institutions which have prominent roles or participation in the financial markets.

The onshore forex market continues to register a daily average volume of US$9.1 billion across all types of FX transactions.

The ringgit currency pair traded at a daily average transaction volume of US$5.2 billion, of which the spot and forward transactions averaged US$2.3 billion daily.

The exchange rate volatility has reduced, with the average intraday movement narrowing to around 53 points in Jan from an average of 82 points in Dec last year.

On the bond market, the FMC said it is well supported by institutional investors, and financial institutions as the primary auctions received strong bid-to-cover ratios of above 2 times for the last three bond issuances.

Non-resident holdings of long-term government bonds stood at 29.6 per cent of total outstanding in Jan 2017, similar to levels of non-resident holdings in Jan last year.

The secondary market volume also recorded a sustainable volume of RM3.6 billion daily.

"BNM and FMC will continue to monitor the progress and feedback from the public on the initiatives, and engage all stakeholders to ensure successful implementation of the initiatives, while creating a conducive and orderly financial market environment to facilitate business activities in support of the economy," is added.

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