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The Bank Negra of Malaysia issued a prompt supervisory intervention to anyone, individuals or banks which are engaged in ringgit trade in the non-deliverable forwards (NDF) market.

Malaysia has been the lowest performing Asian country as per Donald Trump’s unexpected win last November 8, 2016, in the U.S. presidential election. The events jumbled and sparked a global-sell off in emerging markets and emerging economies as well.

The ringgit reached a 13-month low of 4.43 against the dollar; it took a beating of almost 5 percent after the Election Day last November 8 accompanied with the eventual win of Donal Trump.  Apart from the dwindling battle between the dollars, Malaysia’s ringgit also closes at 3.09 against Singapore’s dollar for a 52 straight week low. However, another possible reason for the misfortunate downfall of ringgit is because it has been the better performing currencies in the first five months of the year according to recent reports.

A total of 18 percent of value was lost against the dollar last year, after lurking anomalies of corruption linked to state investment fund 1MDB. But after Prime Minister Najib Razak cleared the scandal investors came drifting back as all concerns are calmed when Mr. Razak denies all allegations and corruptions.

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Bank Negra Malaysia

It has been cleared to local banks that onshore opening ringgit prices cannot reference offshore prices or out of sync with the underlying fundamentals of the economy according to Bank Negro Malaysia Governor Muhammad Ibrahim.

The central bank confirmed that as of Friday, it had been intervening with the onshore market to stem the slide in the ringgit. These trading in the ringgit are causing disquiet among investors and raising concerns about the regulator’s handling of the market. With the sudden changes, investors might feel nervous about the incoming capital grounds.

There is no new policy on capital flows and no new proxy capital control either, Ibrahim also said last Friday. Ibrahim also mentioned that the central bank will implement several measures to boost onshore ringgit trade, particularly against the U.S. dollar and the Chinese yuan.

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