Kuala lumpur: Bank Negara Malaysia (BNM) has stated that its ongoing consultation and agreement with the US Treasury are in line with existing practices and do not compromise its ability to independently formulate monetary policy or safeguard the stability and value of the ringgit.

According to BERNAMA News Agency, the Malaysian central bank highlighted that similar commitments have been made by other major US trading partners, such as Thailand, Japan, South Korea, and Switzerland. BNM emphasized that it has been a routine practice to share foreign exchange intervention data bilaterally with the US Treasury on a semi-annual basis, allowing the US Treasury to quote this data in their Foreign Exchange (FX) Reports published biannually.

BNM further explained that bilateral cooperation is crucial in ensuring Malaysia is not categorized with countries perceived as having non-transparent FX policies. The central bank assured that such disclosures do not include sensitive data and do not hinder its ability to manage excessive volatility and maintain ringgit stability through foreign exchange interventions.

The central bank reaffirmed that its capacity to conduct FX intervention to mitigate excessive exchange rate volatility is consistent with its commitments. BNM’s monetary policy is formulated and executed independently, as stipulated under the Central Bank of Malaysia Act 2009.

BNM clarified that its primary monetary policy objective is to maintain price stability conducive to economic growth, with the overnight policy rate (OPR) serving as the main policy tool. The ringgit exchange rate is not a direct monetary policy objective, and BNM maintains a longstanding stance against using the ringgit to enhance trade competitiveness. The Monetary Policy Committee (MPC) considers exchange rate developments only insofar as they affect domestic inflation and growth prospects.

Recently, BNM and the US Treasury agreed to continue close consultations on macroeconomic and FX matters, reaffirming their commitment under the International Monetary Fund (IMF) Articles of Agreement to avoid manipulating exchange rates or the international monetary system for unfair competitive advantage or to obstruct effective balance of payments adjustment.