ICAEW : BNM's export earnings policy will help stem downfall of ringgit

KUALA LUMPUR: Bank Negara Malaysia's (BNM) new policy requiring exporters to convert 75% of export earnings to ringgit will help to stem the downfall of the currency, said ICAEW economic advisor Priyanka Kishore.
"It is going to lead to a slower degree of depreciation definitely so to that extent it is a useful step but I don't think it changes the momentum until the US dollar shows some sign of slowing down," she told reporters at the ICAEW South East Asia Economic Insight briefing today.
Priyanka said an example of these signs would be a signal from the US Federal Reserve of a slower than expected interest rate hike in 2017 which the markets are moving to price in.
"If they move to reprice that again, that will lead to some pull back in the US dollar and that is way more important at this point of time in terms of turning the tide of the currency," she added.